Working capital is the money available to meet a business’s current, short-term financial requirements.  Some businesses don’t collect cash at the time of sale or service. In fact, many don't receive payment from customers until 30 days (or more) after the service or product is delivered. However, the business’s day-to-day bills such as rent, payroll, utilities, etc. must be paid on time, even if customer payments haven’t been received. Even businesses that get paid at the time of sale still need a healthy cash cushion to weather inevitable slow periods.  Working capital is your safety net, as lack of free cash is the top reason businesses fail. Every business has different working capital requirements. The Seller, the Agent, or your accountant can help estimate the working capital requirements for your particular business.