Summary

A working capital loan is a short-term loan that businesses use to cover day-to-day operational expenses, not long-term investments.

• Short-term (a few months up to ~1–2 years)
• Linked to revenue
  • Cash based accounting 
  • Repay as a percentage of daily sales
• No interest, but rather origination fee
• Amortization based on Effective Interest Rate

Status

Under discussion / under design

Who is Involved

• Unknown User (adamsaghy) (original proposal)

Background/Motivation

• Loan management so far was targeting solely end customers, but loan management should provide products for businesses / merchants, where the requirements might be different
  • Like: Revenue based, open-ended, fixed fee loans

Goals and Exclusions

Change Proposed

Alternatives Considered

Phases of work