Cash flow loan

Cash flow loan,

Definition of Cash flow loan:

  1. A cash flow loan is a type of unsecured borrowing that is used for day-to-day operations of a small business. The loan is used to finance working capital—payments for inventory, payroll, rent, etc.—and is paid back with incoming cash flows of the business.

  2. A type of loan granted to a company based on the current and future level of cash flow that the business may generate. Cash flow loans are usually utilized by businesses that need a quick infusion of cash to deal with operational expenses.

  3. Cash flow loans are not considered conventional bank loans, which entail a more thorough credit analysis of a business. Instead, a lender makes an assessment of the cash flow generation capacity of the borrower when determining the terms of a cash flow loan.

Meaning of Cash flow loan & Cash flow loan Definition