What is working capital?
Working capital is the cash a business uses for day-to-day costs such as payroll, rent, inventory and supplier bills. A working capital loan bridges the gap between paying those costs and getting paid by customers. Through lendflo it is based mainly on recent revenue rather than collateral.
See the full glossaryWorking Capital Loans for Canadian Businesses
Working capital is the fuel that keeps your business running. Whether you're bridging a slow season, preparing for a busy rush, or covering a cash flow gap, lendflo connects you to fast financing — $5K to $250K, funded quickly.
What Is Working Capital?
In plain terms: it is the money available to keep your business operating day-to-day. Positive working capital means you have enough to cover short-term obligations. Negative working capital means short-term debts exceed available assets.
Even profitable businesses can run into cash flow problems — especially when revenue is seasonal or customers pay slowly. That is where working capital financing comes in.
Built for Seasonal Businesses
Get funded before your revenue arrives — not after.
Hospitality & Restaurants
Hire extra staff, expand your patio, stock up on inventory before the summer season — then repay as revenue flows in.
Agriculture & Food Production
Cover planting costs, equipment maintenance, and labour in the spring before harvest revenue arrives months later.
Construction & Trades
Bridge the 30–60 day payment gap between completing a project and getting paid. Fund materials and labour without waiting on invoices.
Retail & E-commerce
Stock up for the holiday rush or back-to-school season without draining your operating account. Repay as sales come in.
Working Capital Solutions
lendflo compares offers from multiple lenders to find the right fit for your business.
Revenue-Based Financing
Repay a percentage of daily or weekly revenue. Payments flex with your cash flow — lower when business is slow, higher when it's busy.
Merchant Cash Advance
A lump sum advance against your future card sales. Ideal for businesses with high credit/debit card volume — restaurants, retailers, service businesses.
Short-Term Business Loan
Fixed lump sum with set weekly or bi-weekly payments over 3–18 months. Predictable repayment schedule for operations with steady revenue.
Invoice Financing
Turn outstanding invoices into immediate cash. Stop waiting 30, 60, or 90 days for clients to pay — get up to 90% of the invoice value upfront.
lendflo vs Bank Line of Credit
Basic Qualification Requirements
Frequently Asked Questions
We’re here to simplify your business financing journey, so you can feel confident every step of the way.
Working capital is the difference between your current assets (cash, receivables, inventory) and your current liabilities (payables, short-term debt). It is the fuel that keeps your business running day-to-day — covering payroll, rent, inventory, and operating expenses while you wait for customer payments or navigate slow seasons.
lendflo connects Canadian businesses with working capital financing from $5,000 to $250,000. The amount you qualify for depends primarily on your monthly revenue — most lenders offer 1 to 1.5 times your average monthly revenue.
A bank line of credit requires strong credit, collateral, and lengthy approval — often 4–8 weeks. Working capital financing through lendflo can be approved quickly, requires no collateral, and considers all credit profiles. Repayments are also flexible, often tied to your daily or weekly revenue so they adjust with your cash flow.
Yes — in fact, seasonal businesses are one of the best fits for working capital loans. Restaurant owners preparing for patio season, retailers stocking for the holiday rush, or construction firms ramping up in spring all commonly use working capital financing to bridge the gap before revenue peaks.
No. lendflo works with lenders that focus on your business revenue and cash flow, not just your credit score. Business owners with credit scores as low as 550 can qualify if they have consistent monthly deposits and at least 6 months in business.
Most approved applicants receive funds shortly after signing their agreement. The application itself takes about 5 minutes, and a decision typically comes back within 24 business hours.
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Common uses of working capital
Everyday costs that come due before customers pay.
- Payroll — in a slow month.
- Inventory — ahead of a busy season.
- Rent and utilities — while revenue catches up.
- Supplier bills — when customers pay late.
- A large order — that needs money up front.
- A bridge — after a dip in revenue.
Term loan or line of credit: which fits?
The two tools solve different problems.
| Feature | Term loan | Line of credit |
|---|---|---|
| How you get the money | One lump sum | A limit you draw on as needed |
| How you repay | Fixed payments on a set schedule | Repay, then borrow again |
| Interest is charged on | The full amount borrowed | Only the balance you use |
| Payments are | Predictable | Variable with what you draw |
| Best for | Equipment, expansion, hiring | Ongoing swings in cash flow |
People also ask
It covers day-to-day costs such as payroll, rent, inventory and supplier bills while you wait for customers to pay. Borrow only what expected revenue can repay, and compare the total amount repaid across offers rather than the headline rate.
A term loan pays a lump sum that you repay on a fixed schedule, best for planned investments. Working capital covers everyday expenses, with repayment often tied to monthly revenue. Term loans usually cost less; working capital is faster and more flexible.
You apply to a bank, credit union or online lender, which sets a limit you can draw on, repay and draw on again, paying interest only on what you use. Lenders look at revenue, time in business and credit. lendflo can show term loan and line of credit offers side by side.
A term loan pays out a lump sum that you repay on a fixed schedule, so payments are predictable. A line of credit is revolving: you draw what you need up to a limit and pay interest only on the balance. Term loans suit one-time purchases such as equipment or expansion; lines of credit suit ongoing swings in cash flow.
Terms explained
What is working capital?
Working capital is the cash a business uses for day-to-day costs such as payroll, rent, inventory and supplier bills. A working capital loan bridges the gap between paying those costs and getting paid by customers. Through lendflo it is based mainly on recent revenue rather than collateral.
See in the glossaryWhat is a business line of credit?
A business line of credit is a revolving credit limit: you borrow what you need, repay it, and borrow again, paying interest only on the balance you use. It suits ongoing swings in cash flow better than a one-time purchase, which a term loan handles better.
See in the glossaryWhat is revenue-based financing?
Revenue-based financing is funding repaid as a percentage of monthly revenue instead of a fixed monthly payment. Payments are lower in slow months and higher in busy ones, which suits businesses whose income rises and falls with the season.
See in the glossaryTopic guide
In this guide: Working capital and cash flow
Covering everyday costs: working capital, lines of credit, invoices, seasonal gaps and cash-flow planning.
- Working Capital Loans in Canada: How They Work
- Cash Flow Management for Small Business
- Seasonal Business Financing in Canada
- Invoice Financing vs. Factoring in Canada
- Merchant Cash Advance in Canada: Is It Right?
- Revenue-Based Financing in Canada: Guide
- Asset-Based Financing Canada
- Merchant Cash Advance Alternative