Working capital

Working capital is the difference between a business's current assets, such as cash, receivables and inventory, and its current liabilities, such as payables, payroll due and short-term debt. In plain terms, it is what you have to run the business over the next few months after what you owe is taken out.

Owners of businesses with a long float often find that most of their working capital is tied up in receivables and retainage: money earned, not yet collected. "Working capital funding" is a broad label for financing meant to cover that gap rather than to buy a specific asset. Any such funding has a cost and conditions that should be weighed against the margin on the work it carries.