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What can working capital be used for?

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What can working capital be used for?

Working capital is essentially the capital that is required for a business to run on a regular basis. The uses of working capital are:
1. Maintaining an optimum level of inventory
2. Paying creditors on a timely basis
3. Having a cash reserve
4. Managing short-term debts
5. Meeting unforeseen or unpredictable expenses
6. Meeting miscellaneous day-to-day business expenses

In some cases, particularly when a business might experience a cash crunch due to an impending financial contingency, it may require a working capital loan.

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