The most common requirement for honest working capital occurs when either business has just started its prospect or an existent business tends to grow its customer base and revenues. While launching or setting up a new business you will definitely require initial funds or working capital so as to cover your inventory and accounts receivable balances until you commence for the collection of your receivables.

The first and foremost source of your funds would be your accounts payable, which signifies the credit terms you have conferred with your trade vendors for purchases.

Any additional funds required to cover the working capital will come from external funding companies. These types of start-up companies will earn equity from their own personal funds and/ or other related/ unrelated investors.

For new businesses and start-up companies provision of a high amount of initial working capital or funding is very much important and necessary. In order to enhance their growth and facilitate their products in the market, they would require initial working capital for different types of purposes.

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