Can the repayments fit your cash flow?

Understand working capital first

Working capital is commonly defined as current assets minus current liabilities—resources expected to turn into cash within a year, minus obligations due within a year. “Working capital funding” often refers to financing everyday operations, not a single product.

Cash flow means when money actually enters and leaves your business. A sale on an unpaid invoice can count as revenue before the cash arrives. SBA’s business finance guidance distinguishes financial records and methods; FDIC’s Money Smart curriculum includes cash-flow education.

Start with your bank balance and upcoming payment dates, not just a monthly sales total.

Sketch the cash left after payments

This is not the ending bank balance; it excludes starting cash and any omitted inflows or outflows. Include taxes, owner withdrawals, irregular bills, and reserves in a real forecast. Avoid counting an existing payment twice if it is already included in operating outflows.

Try a slower-sales month

In the same illustration, customer receipts falling to $27,000 with every listed outflow unchanged would leave a $1,500 shortfall. The question becomes how the business would cover it—not just whether a provider would approve the funding.

Try a late customer payment, a repair bill, or a quiet season. These are your scenarios, not predictions. Consider a smaller purchase, different timing, supplier terms, or waiting if the plan only works with perfect sales.

Payment frequency changes the picture

A positive month can still include a cash shortage on a particular day. Put daily or weekly collections on the same calendar as payroll, rent, and expected receipts. Do not assume a fixed withdrawal will automatically fall when sales fall.

For sales-based arrangements, ask exactly how collections are calculated and whether adjustments for lower receipts are available under the contract. Request the procedure in writing.

A useful decision can be “not yet”

Funding can bridge a timing gap, but it does not by itself repair ongoing losses. If each ordinary month already uses more cash than it brings in, investigate the cause before adding payments.

Bring your forecast to an accountant or business counselor if the numbers are uncertain. Read the cost guide to include fees, and the preparation guide to organize records.