Working Capital 101: A Simple Guide for Small Business Owners

Working capital is the financial lifeline of every business. Whether you’re running a startup, a contracting company, a retail operation, or a growing service-based firm, the amount of working capital you have determines how smoothly your business can operate day to day. At Goodwin Capital Solutions, we help business owners understand and access the capital they need to succeed. This guide breaks down what working capital is, why it matters, and how to strengthen it.

Working capital is the money your business uses to pay for its short-term needs—expenses like payroll, inventory, supplies, and operating costs. It’s calculated with a simple formula:

Working Capital = Current Assets – Current Liabilities

If you have more available cash and assets than you owe in the short term, your business is in a healthy position.

Strong working capital allows your business to:

• Pay bills on time
• Take advantage of growth opportunities
• Handle seasonal slow periods
• Avoid cash-flow emergencies
• Maintain reliable operations

When working capital is low, owners often struggle to cover even basic expenses. This can cause stalled growth, supplier issues, and operational delays.

Many business owners don’t realize they’re low on working capital until it becomes urgent. Watch for:

• Delayed customer payments
• Rising supply costs
• Seasonal dips in revenue
• Difficulty restocking inventory
• Trouble making payroll
• Limited cash reserves

If any of these sound familiar, it may be time to strengthen your cash flow.

You can increase your available capital by:

• Improving invoice collection
• Reducing unnecessary expenses
• Managing inventory better
• Negotiating longer payment terms
• Increasing sales and pricing
• Accessing short-term financing

Financing is one of the fastest and most effective ways to boost working capital—especially when growth opportunities arise.

We offer flexible funding options designed specifically for small and mid-sized businesses who need fast access to cash. Unlike traditional banks, our approval process is simple, fast, and accessible—even for businesses with past financial challenges.

Our working capital funding can help you:

• Cover payroll and operating expenses
• Purchase inventory and equipment
• Manage seasonal slowdowns
• Take on new projects
• Bridge cash-flow gaps

If your business needs reliable working capital, our team is here to help you get approved quickly.

Working capital keeps your business moving. Understanding it—and accessing the right financing—can help you stabilize cash flow and grow confidently. Goodwin Capital Solutions is committed to supporting business owners with flexible funding tailored to real-world needs.