Commercial Loans and Lines of Credit

At Westfield Bank we work to provide your business with a variety of options to fit your small business needs. Westfield Bank will take the time to listen to your personal story, assess the needs of your business and find the right lending solutions for you. Larger lenders typically have set parameters for loan approval. Therefore you may not qualify simply because your business plan does not perfectly fit into their lending model. At Westfield Bank our philosophy is simple: when we help our clients grow their business, we grow as well. Contact one of our Commercial Lending Advisors for further information.

What is Short Term Working Capital?

Small business owners often struggle to understand the concept of working capital. Simply, working capital is the amount by which current assets exceed current liabilities. Working capital has a direct impact on cash flow in a business. Since cash flow is the name of the game for all business owners, a good understanding of working capital is imperative to make any venture successful.

The need for working capital is often determined by the operating cycle. The operating cycle is the average time between purchasing or acquiring inventory and receiving cash proceeds from its sale. When the operating cycle causes current liabilities (including accounts payable) to exceed current assets, a line of credit may be needed to provide cash for short-term use.

At some point in their operations, most small businesses need short-term working capital. Businesses that are seasonal or those that occasionally experience months when orders are unusually high may benefit from a working capital line of credit. This creates a need for working capital to fund the purchase of inventory until accounts receivable are collected.