Lastly,
since the 504 loan is two separate loan notes it requires two separate loan approvals and credit reviews this can result in a longer approval and funding process. Working capital is the difference between the current assets or the short term assets that a company holds and the current liabilities or the short term liabilities which the company has to dispose of. Thus, working capital actually depicts the financial health of the company in a short period. It shows whether a company has enough finances or assets to take care of any short term liabilities that may arise. Calculation of the working capital is done after calculating both the current assets and liabilities. It is very important to know what is included while arriving at the current assets and liabilities figure. Here is the explanation along with a simple example for your reference. Current Assets and LiabilitiesAssets of a company are of two types―long term assets and short term assets. Short term assets, also known as current assets, are those which will either be used or sold within one
operating cycle, usually one year. Current assets are calculated as the sum total of the cash or cash equivalents, current inventory, accounts receivable, as well as marketable securities. Liabilities of a company are of two types―long term liabilities and short term liabilities.
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For example, recent legislation increased the lending capacity of SBA programs and created tax incentives for business investment.
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The "Ugly" is the program is on a first come first serve basis. The program will expire once the $336 million in program funds is used or by September 30, 2010, whichever comes first. Currently there are over 400 lenders that have funded ARC loans. The "Good" loan approval are relatively fast within 36 hours and revolving loans up to 7 years with maturity extensions are allowed. Lenders are also not required to take collateral for loans up to $25,000. However, the lender may use their in house credit guidelines on collateral policy for loans greater than $25,000 up to $350,000. The "Bad and Ugly" is that this program has a higher borrowing cost then the other SBA loan programs. Although lenders and borrowers can negotiate interest rate, lenders may charge up to 6. 5% over prime for loans under $50,000 and up to 4. 5% for loans over $50,000. Unlike, the 7a loan program for example in which the maximum spread over prime is 2.
