Working Capital Loan

A working capital loan is short-to-mid-term financing designed to cover everyday operating needs—payroll, inventory, supplier deposits, repairs, taxes, and seasonal slowdowns. Unlike an equipment loan (used to buy a specific asset), working capital funding keeps your business moving when cash is tied up in receivables or project costs. Start here if you need fast liquidity and flexible use of funds: Working Capital Loan.

Mehmi Financial Group is a Canadian boutique lender-broker serving SMEs nationwide. We also sell equipment directly, which lets some clients combine a cash-flow facility with an equipment purchase to secure better timelines and pricing.

How a working capital loan works

• Purpose: Cover operating expenses and timing gaps.
  
  
• Structures: Term loans, revolving lines of credit, merchant cash advances, factoring, asset-backed facilities.
  
  
• Underwriting focus: Bank statements, receivables, margins, industry risk, and debt service capacity (not just fixed assets).
  
  
• Speed: Boutique programs aim for clear answers within 24–48 hours with a complete file.
  
  
• Where to start: Estimate payments with the calculator, then compare options below.
  
  

Common working capital options in Canada

Related options if equipment is part of the plan: Equipment Loans, Asset-Based Lending, or Business Refinancing. For eligible bank-backed solutions, see CSBFP.

When to use working capital vs. equipment financing

• Working capital loan: Payroll, supplier deposits, tax remittances, marketing, emergency repairs, bridging receivables.
  
  
• Equipment financing: Buying a truck, machine, or POS system you’ll use for years. If you’re buying from us, browse Inventory and we can pair the purchase with the right cash-flow facility.
  
  

What lenders look for

• Consistent deposits and manageable NSF history on bank statements
  
  
• Proof of demand (contracts, POs, backlog)
  
  
• Reasonable leverage and ability to service debt
  
  
• Clear use of funds and contingency plan
  
  
• For secured options: asset lists and lien status
  
  

If you’re early-stage or rebuilding credit, ask about In-House Financing and tiered structures.

Quick qualification checklist

• 3–6 months business bank statements
  
  
• Government ID and basic corporate docs
  
  
• A/R aging or sample invoices (if factoring)
  
  
• Latest invoice/quote if equipment is part of scope
  
  
• Short note on how funds generate ROI within the term
  
  

Real-world example

A Mississauga HVAC contractor won several spring change-out jobs but needed supplier deposits and extra technicians before invoices would pay. Mehmi set up a Line of Credit for materials and a small Unsecured Term Loan for labour ramp-up. Cash converted within 45–60 days, the LOC revolved, and the loan was partially prepaid from project profits—no missed opportunities.

FAQ

What’s the difference between a working capital loan and a line of credit?
A loan is a lump sum with fixed payments; a line of credit is revolving—you draw and repay as needed.

Can I qualify if customers pay in 30–60 days?
Yes—invoice/freight factoring or a LOC can bridge slow A/R.

Is collateral required?
Not always. Unsecured loans rely more on cash flow; secured loans and asset-based lending can improve pricing and limits.

How fast can I get approved?
With a complete file, boutique programs often give decisions within 24–48 hours.

Will this affect my ability to buy equipment later?
Not if structured correctly. We can parallel a working capital facility with equipment financing.

Are bank-backed programs available?
Potentially—review the CSBFP with our team.

‍

Ready to map the right mix for your cash-flow needs? Run scenarios with the calculator and feel free to contact our credit analysts via Contact Us.