What Is Short-Term Working Capital?
Short-term working capital refers to funds needed by a business to handle the standard and usual expenses associated with the operation of the company. Working capital of this type makes it possible for the business to meet its obligations to vendors and suppliers in a timely manner, which in turn helps to protect the credit rating and reputation of the business. While many businesses are able to generate short-term working capital through receipt of customer payments, there are situations in which businesses will utilize some other strategy to obtain the capital needed to manage currently pending debt obligations.
