Working capital management is crucial for all stakeholders in businesses of all shapes and sizes. Finance is available to ensure liquidity to meet short-term obligations and support day-to-day operations.
Management teams plus outside investors and creditors use working capital to assess a company's financial health and risk level, with positive working capital leading to a multitude of benefits - for example, suppliers evaluate a company's working capital to gauge its reliability in paying invoices on time, or large companies with tender processes will assess a supplier’s ability to deliver the project whilst they maintain lengthy payment terms. Effective working capital management is essential for strategic planning, cash flow forecasting, and operational efficiency.
Working capital finance is versatile, suitable for various businesses needing to manage cash flow gaps or support growth, including:
Working capital finance is essential for businesses facing operational expense challenges, waiting on payments, or seizing expansion opportunities, making it a critical tool for maintaining liquidity and fostering growth.
Items to consider:
There are a multitude of different types of working capital facility, so as advisors, we would absolutely advocate for understanding the options thoroughly before entering into a facility. Often just a tweak of structure will materially affect price and ‘ease’ of any facility.