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Working Capital

Today's Must Read
By Don Sadler |  Filed In: Checking & Savings Accounts and Cash Deposit Services
Manage cash to receive the highest return while maintaining liquidity.
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Every girl knows she needs a great jacket to go with any outfit, and Christina Houghton and Louisa Guy Roeder were no exception. They just had more guts than most! Christina and Louisa,...
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AB Guest Blogger
Simply walking out of the day job to start our own business is rarely a realistic option. But there is a better way to begin your new career as a business owner.
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By Carol Tice |  Filed In: New Issues and Equities
PIPE deals are appealing for public companies because they face fewer regulatory hurdles than a stock offering.
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Uncertainty and hopelessness are gripping Gulf region small businesses as the nation's worst environmental disaster continues to grow.
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Sam Thacker
Many industries lend themselves well to using factoring as a form of working capital finance, but for construction trade subcontractors it is a difficult process.
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Keith Girard
Recessions have traditionally be spawning grounds for new businesses. The government should redirect some resources to help entrepreneurs launch new firms.
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By Jeff Elgin |  Filed In: Buying a Franchise and Franchises
Multi-unit franchising can mean more money—but also more challenges. Here’s how to decide if owning multiple units will work for you.
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By Sara Wilson |  Filed In: Buying a Franchise and Franchises
A growing number of franchisors are recruiting seniors as franchisees. What’s behind the trend — and what do seniors considering a franchise need to know?
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Rieva Lesonsky
I recently spoke with Maria Pinelli of Ernst & Young about the company's Entrepreneurial Winning Women program, which is designed to help female business owners overcome the unique challenges they face.
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Marco Carbajo
What types of small business loans are available? Get info on the pros and cons of the most common types of small business loans.
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Rieva Lesonsky
I've just returned from the SBA's National Small Business Week in Washington, D.C. After meeting with some of the nation's best and brightest entrepreneurs, small business owners, and business leaders (and teaching them...
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Rieva Lesonsky
You may think you're saving money by hanging on to your old desktops and laptops, but are you really? Here's an insider's point of view.
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By Ken Walker |  Filed In: Franchises
International Franchise Association chairman Ken Walker contends Congress should focus on policies that encourage lending and create sustainable long-term job growth.
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". . . we must keep at doing our work, building the evidence, and growing the partnerships to ensure audiences have access to all of the perspectives and voices they need to be...
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By Keith Girard |  Filed In: Recession and Economic Conditions
They're especially vulnerable in a recession because owners don’t do the things they need to do to operate efficiently.
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By Marco Carbajo |  Filed In: Small Business Lending and Banking, Lending & Credit Services
Entrepreneurs have always sought help from friends and family for startup capital. Now there are new tools and technology to help you better structure these loans.
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By Marco Carbajo |  Filed In: Small Business Lending and Banking, Lending & Credit Services
Originally designed for tiny businesses in the Third World, microloans are increasingly popular with small businesses in the United States.
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By  | Filed In: XML and Markup Languages
The book, Built to Sell, by John Warrillow did a very good of describing the typical process of selling a business using most M&A firms. However, we are not typical. Here is how...
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Marco Carbajo
Learn why a microfinance loan might be the solution you've been looking for.
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New On AllBusiness

Business Glossary

Definitions for: negative working capital
negative working capital

situation in which the current liabilities of a firm exceed its current assets. For example, if the total of cash, marketable securities, accounts receivable and notes receivable, inventory, and other current assets is less than the total of accounts payable, short-term notes payable, long-term debt due in one year, and other current liabilities, the firm has a negative working capital. Unless the condition is corrected, the firm will not be able to pay debts when due, threatening its ability to keep operating and possibly resulting in bankruptcy.

To remedy a negative working capital position, a firm has these alternatives: (1) it can convert a long-term asset into a current asset-for example, by selling a piece of equipment or a building, by liquidating a long-term investment, or by renegotiating a long-term loan receivable; (2) it can convert short-term liabilities into long-term liabilities-for example, by negotiating the substitution of a current account payable with a long-term note payable; (3) it can borrow long term; (4) it can obtain additional equity through a stock issue or other sources of paid-in capital; (5) it can retain or "plow back" profits.

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