Working Capital Calculator
Understand how lenders evaluate your liquidity
Working capital — current assets minus current liabilities — tells lenders whether your business can meet short-term obligations. A weak working capital position or current ratio below 1.0x can trigger additional scrutiny or require a personal guarantee even on otherwise strong credits.
- ✓Working capital dollar amount
- ✓Current ratio (current assets ÷ current liabilities)
- ✓Status vs. lender thresholds
Most lenders look for a current ratio ≥ 1.20x.
Frequently Asked Questions
What is a good current ratio for a business loan?
Most lenders want to see a current ratio of at least 1.0x — meaning you have enough current assets to cover current liabilities. 1.25x or higher is preferred. Below 1.0x is a yellow flag that will require explanation.
What counts as current assets?
Cash and cash equivalents, accounts receivable (due within 12 months), inventory, and prepaid expenses. Don't include long-term receivables or fixed assets.
What counts as current liabilities?
Accounts payable, the current portion of long-term debt (payments due in the next 12 months), accrued expenses, and short-term credit lines with balances outstanding.