Finimpact
Is permanent working capital always fixed for the long-term?
Permanent working capital is expected to be fixed for the long term. However, the amount required can change over time as your business grows.
What is a permanent working capital loan?
A permanent working capital loan provides the funds you need to keep up with your financial obligations. Typically, this loan type has a long term to minimize the impact on working capital requirements.
How do you get a permanent working capital loan?
In order to get a permanent working capital loan, most lenders will require you to show two years of strong profits. Additionally, you may need a good credit score or high income to qualify for this loan type.

Conclusion

You can think of permanent working capital as the minimum amount of money you need to operate your business for the short term. As a business owner, keeping this number at the top of your mind can help you avoid getting into a financial pinch. Regularly check on your permanent working capital needs to prevent some unexpected money problems.

Now that you understand the concept of permanent working capital and you know how to calculate it, you might like to learn more about working capital loans and how they could help your business.

About the Author

Sarah Sharkey

Sarah Sharkey

Personal Finance Writer

Sarah Sharkey is a personal finance writer who enjoys helping people make better financial decisions. Sarah enjoys traveling, hiking and reading when she is not writing.

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