Small Business Working Capital Line of Credit: Support Growth Strategies
April 28, 2025
Managing cash flow is one of the top responsibilities of any small business. It’s always top of mind – whether covering operational expenses, purchasing inventory, making payroll, or bridging gaps in the revenue cycle.
Having access to financing options can help support your latest business needs. For companies in the Southeast Texas Gulf Coast region, a small business working capital line of credit could be the right solution to ensure your business remains healthy and capable of growing.
Learn more about how a working capital line of credit works, the options available for local small business owners, and how you can apply for business loans and financing.
What is a Small Business Working Capital Line of Credit?
A working capital line of credit is a business line of credit designed to help small businesses manage short-term expenses. This revolving credit option provides access to funds when needed, providing your company with flexibility during cash flow challenges without needing to reapply for a loan every time.
Unlike term loans, which provide a lump sum upfront, a working capital line of credit allows you to borrow and repay repeatedly – up to a predetermined limit – during the loan term. Whether you face delays in payment from accounts receivable or need funds to keep up with payroll, this type of small business loan may help bridge those gaps.
Key Benefits of a Working Capital Line of Credit
Take a look at some of the most important reasons why your company should consider applying for a line of credit.
1. Improves Cash Flow Management
Many small businesses experience gaps between expenses like payroll or inventory purchasing and revenue collection, particularly when dealing with credit terms for customers. A working capital loan ensures you have sufficient funds to manage cash flow during periods of uncertainty.
2. Flexibility in Usage
Funds from a working capital line of credit can be used for various business needs, including inventory purchases, covering daily expenses, and addressing shortfalls between accounts receivable and payable.
3. Helps Build Credit
Using a line of credit responsibly can positively impact your business’s credit score, making it easier to secure other types of funding in the future as your business grows and has other needs (e.g., applying for an equipment loan).
Top Options for a Small Business Working Capital Line of Credit
Local businesses have options when it comes to securing a working capital line of credit. Consider two of the most popular solutions.
1. Working Capital Lines from Texas Gulf Bank
As a trusted lender in the Southeast Texas Gulf Coast region, we offer working capital lines of credit tailored to help businesses bridge gaps in cash flow. Here are the highlights of our working capital loans:
- Secured by working capital assets such as accounts receivable and inventory.
- Flexible loan amounts based on your business needs.
- In-house loan review process once you complete the application process.
To qualify for this type of loan, a business must have an adequate history of profitability and satisfy the minimum annual revenue requirements. We also look for sufficient collateral coverage and capital reserves to ensure your company can repay the loan over time.
2. SBA Loans
The Small Business Administration (SBA) provides excellent lending options for local businesses through its 7(a) loan program, which includes working capital lines of credit. Some key benefits include:
- Loan amounts up to $5 million.
- Competitive interest rates.
- Flexible repayment terms.
The SBA 7(a) program is designed to provide government-backed loans to businesses that may not qualify for traditional loans. SBA loans can be used to finance typical business operations – such as purchasing inventory, satisfying insurance premiums, and covering many other daily expenses.
Not sure if the SBA route is the right fit for your business? Our team of SBA loan experts can help review your business situation and make a proper recommendation.
Is a Working Capital Line of Credit Right for Your Business?
A working capital line of credit is ideal if your business occasionally struggles with cash flow or experiences seasonal downturns. Companies in industries such as food and beverage, hospitality, professional services, and many others often rely on working capital financing to maintain operations without interruptions.
If you’re unsure which funding solution fits your business, we recommend consulting with the local lending team at Texas Gulf Bank. Our lenders offer hands-on guidance to help you choose the right option based on your specific needs.
Take the First Step Toward Supporting Your Business
A small business working capital line of credit may be the financial tool your business needs to meet the challenges of short-term expenses while driving long-term growth. With support from the trusted lenders at Texas Gulf Bank, we can help your business move forward with confidence.
Contact Texas Gulf Bank to discuss available lending options. We can help you get started today so you can take control of your business’s financial future.
All loans subject to credit approval.