Working Capital Health Check

How to use this

This isn't a financing tool — it's a diagnostic. Run it once a year (or when something material changes: losing a customer, taking on an MCA, opening a new LOC, hiring up). The grade tells you whether financing is the right next move, or whether you should be doing something else first.

Grade A or B: Healthy. Reserve cash in a sweep account. If you want growth optionality, an undrawn LOC is cheap insurance — you pay nothing if you don't use it. Skip MCA entirely at this stage.

Grade C: Watch your biggest flag. Concentration over 50% is the most common C-grade issue — diversifying revenue beats financing every time. If it's runway, grow the LOC to 2-3 months of fixed expenses before you need it.

Grade D: Cash-flow vulnerable. An MCA may help bridge a short-term gap but probably won't fix the underlying issue. Consider longer-term restructuring: a term loan for stable debt, AR factoring if you have B2B receivables, or a hard look at your expense structure.

Grade F: Critical. Your 90-day stress test goes negative — you cannot survive a 30% revenue drop without outside capital. Schedule a real conversation ASAP. Possible paths: reverse-consolidation of existing MCAs, hardship modifications with lenders, aggressive cost reduction. Do not add new MCA without restructuring existing debt first. That's how good businesses become un-savable.

What this can't see

This calculator looks at your last 12 months and asks "what if revenue dropped tomorrow?" It can't see:

• Seasonality patterns. A landscaping business in February is naturally cash-poor; that's not the same as being in distress.
• A signed contract that's about to fund. If you have a $500K contract starting next month, your D-grade today is a temporary state.
• Owner discretion. Many SMB owners take a personal draw they could halt in a crisis. That's a real lever the model can't quantify.
• The quality of your customers. Two businesses with the same concentration % can have wildly different default risk depending on who the customers are.

Use the grade as a starting point for a real conversation, not a final decision tool.

Which path fits you?

This tool helps three audiences. Pick the one that's you.

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