Working Capital

A structured discussion around the business need.

Every business owner knows that cash flow is king. Everything has a cause and effect; never lose an opportunity because of working capital.

Working capital problems are rarely about profitability. They are about timing — an order arrives before the cash from the last one, or a supplier wants paying on terms the customer will not match. The facility has to scale with the trading cycle rather than sit at a fixed ceiling set last year.

A branded distributor in talks with large retailers needed to prove it could deliver before the orders were placed. We arranged a $3,000,000 authorised revolving facility, preauthorised so it scaled as orders were received. It removed the risk of non-delivery, and the certainty let the client negotiate a 2% discount from suppliers in exchange for swift payment.

Public financing options

Terms and availability depend on the business, transaction, and lender. Publicly described considerations in this area include:

The useful starting point is your trading cycle: how long between paying a supplier and being paid by the customer, and how far that stretches in your busiest month. It can also identify the people to involve, the matters requiring validation, and the order of next steps so the discussion remains useful to both the business and the lender.