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What working capital means
Working capital is what you have available to meet short-term obligations: current assets like cash, stock and unpaid invoices, minus current liabilities like supplier bills and tax due. Positive working capital means you can cover the coming year's bills.
Why it matters
Too little working capital and you cannot pay the day-to-day, however profitable you are on paper. Growth and seasonality both eat it, which is why short-term finance exists to fund the gap. See working capital explained.
What it means for you
For the full definition see the glossary entry. Credicorp lends to your company, not to you personally, and takes no personal guarantee. See business loans or apply online.
Frequently asked questions
Is working capital the same as cash?
No. Cash is one part of it. Working capital also includes stock and money owed to you, minus what you owe. A business can be profitable and cash-poor if too much is tied up in stock or unpaid invoices.
What is negative working capital?
When current liabilities exceed current assets, meaning short-term bills outweigh short-term resources. It can signal a cash squeeze, though some efficient businesses run it deliberately.
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Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.