Working Capital Best Practices: 3 Rules I've Learned Funding Businesses

John Lin  ·  May 8, 2026

I've been funding business owners across every niche you can think of. And I can tell you with absolute certainty the way your capital is structured is either making you money or burning it. There is no in-between.

TL;DR: The wrong financing structure can bleed a business dry. This short guide covers the 3 best practices I've battle-tested across $5M+ capital deployed, so you can stop guessing and start growing.

Most owners obsess over cost. They'll spend hours haggling with brokers and shopping for better rates. Then they take the kind of capital that hurts their business anyways. 

I've seen it hundreds of times. 

Why Your Capital Structure Matters More Than Cost

Here's something most owners don't want to hear...

You can have the perfect amount funded. Decent rates. But if the structure doesn't fit, none of it matters. 

I learned this the hard way working with a broker in Miami. Funders were lending like crazy. Businesses were getting funded constantly, yet defaults kept happening.

The problem was ALWAYS how capital was structured.

Every time we fixed the structure, the numbers turned around. Not sometimes. 

Every single time.

The structure is where money is made. Rates are just part of the equation. The way it's put together is what makes you grow. 

The foundation: Flexibility

Here's something most owners don't want to hear...

Whatever your structure is... you need it backed by flexible terms. If your deal is fixed with no backup when business slows down, you've already lost. 

When you structure the deal, you need to have a healthy reserve set aside. Your broker should negotiate on your behalf - if things slow down, adjusted payments kick in immediately to match your cash flow. 

Here's how I think about it...

Your funder is your partner. There’s mutual interest for you to succeed. If there's a disconnect, you get overwhelmed. And the funder gets frustrated by missed payments. 

Good funding should adjust with your business, not work against it.

Speed & Clarity

How clear is your direction? And how fast can you move toward it?

A plane doesn’t fall out of the sky the moment its engines fail. It keeps moving because of speed. And unless you have a clear roadmap of where you're going, you'll find it very difficult to move quickly.

I know because I've been there. I've seen it across hundreds of businesses. It wasn't until I got very clear on the outcome, that everything changed for me. 

When you borrow capital, move quickly and have a clear path forward, you pull ahead of the competition.