Working capital financing is short-term business funding for payroll, supplies and running costs while income catches up. Orchardmark Financial, a small-business funding broker in Scranton, Pennsylvania, explains how lending partners size and schedule it for Lackawanna County owners, then sends requests to partners, which decide and set every rate and term.
| Built for | Payroll, supplies and bills while income catches up |
|---|---|
| Term | Short; usually months, not years |
| Repaid | Set installments, weekly or monthly as a rule |
| Lackawanna County payroll | $4.49 billion across 5,198 employers (CBP 2023) |
| Who decides | Always the lending partner, not the broker |
What working capital financing covers
Working capital is the money a business needs to keep operating between paying out and getting paid. Financing it makes sense when the shortfall is temporary and the income that closes it can be named: an insurer's payment on submitted claims, a general contractor's progress payment, a wholesale order that ships next month. It does not fix a business that loses money every month; borrowing in that situation only adds a payment to the loss.
Write the gap down before you call anyone: the bill, its due date, the income that will cover it and the date that income should arrive. Measured in dollars and days, that gap is your request.
Short term or long term: where a working capital loan sits
Short term. Most working capital financing runs for months rather than years, because it is meant to cover a cycle, not to buy something that lasts. If what you are paying for will still be earning in five years, such as a renovation or a piece of equipment, a term loan or equipment financing usually suits it better.
How partners settle on an amount
A partner works from the business's own records, not a published menu. The usual inputs are average monthly deposits, how much those deposits swing from month to month, payments already leaving the account for other loans, leases or advances, time in business and credit history. Many partners keep the new payment modest compared with monthly deposits so the business can still meet its other obligations.
Three numbers answer most first questions: total deposits for each of the last six months, the weakest of those months, and the sum of every debt payment already coming out of the account.
How working capital is repaid
Most working capital is paid back in fixed installments by automatic debit, often weekly or monthly, over the short term agreed at signing. Some products debit daily. Ask for the payment amount, how often it is taken, the number of payments, the total repaid and every fee in writing, then check that your weakest recent month could carry the payment.
Some offers described as working capital are merchant cash advances. An advance is not a loan: it is a purchase of future receivables, collected from sales, with a different cost structure and different remedies. How an advance is collected covers it, and an advance compared with a loan goes through the trade-offs.
Can working capital be used for payroll and payroll taxes?
Generally, yes; "can working capital be used for payroll" is a frequent search, and partners recognize payroll as a legitimate purpose. They look for evidence that the shortfall is temporary. A practice waiting on claims, a crew between progress payments, or a kitchen that bought ahead for a booked event all fit that description. Needing outside money every pay period does not.
Keep withheld payroll taxes separate in your plan. If cash is tight, pay those first; partners reading bank statements notice missed or late tax payments.
Working capital versus a credit line or an advance
If the gap comes back every month in a different size, a revolving line of credit may fit better than a one-time advance of funds, because you draw only what each month needs. A merchant cash advance is generally the costliest of the three and is not a loan. Compare all of them in dollars, using the total each one takes back. The six structures side by side sets out the differences.
Payroll weight across Lackawanna County, PA
Employers in Lackawanna County paid about $4.49 billion in wages to 91,059 employees in 2023 (U.S. Census Bureau, County Business Patterns 2023). The sectors our partners fund carry a large share of that:
- Ambulatory health care, which includes physician and dental offices: 530 employer establishments, 8,852 paid employees and about $616.6 million in annual payroll.
- Food services and drinking places: 538 establishments and 7,297 paid employees.
- Construction: 457 establishments, 3,483 paid employees and about $248.2 million in payroll.
Each sector has its own reasons for a timing gap, covered on the pages by sector. County context and local contacts are on the city page.
Before you accept an offer
- Get the total repaid and every fee in dollars.
- Line up the payment dates with the days your deposits arrive.
- Ask whether paying early lowers the total cost.
- Find the lien and personal guarantee clauses and ask what each one reaches.
- Read the default section as carefully as the payment table.
Where Orchardmark Financial sits in the process is laid out in the steps of a request.
By Orchardmark Financial · Updated
