Working capital guide
A practical guide to working capital financing
Understand where the need comes from, how common facilities work, and what information supports a well-sized working capital solution.
The purpose
Finance the timing between cash outflows and inflows
Pressure often appears when the business must pay employees and vendors before receivables, inventory, or completed work convert to cash.
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Common uses
Inventory purchases, payroll, vendor payments, seasonal buildup, contract mobilization, and receivable timing.
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Common pressure points
Rapid growth, long customer terms, delayed projects, margin changes, and uneven seasonality.
Facility types
Choose a structure based on the support and repayment source
Different facilities evaluate cash flow, receivables, inventory, and other business assets in different ways.
Working Capital
Draw, repay, and reuse availability for recurring operating needs, subject to facility terms.
Asset-Based Lending
Availability tied to eligible receivables, inventory, or other collateral, less applicable reserves.
Cash Flow Lending
Financing evaluated primarily against recurring operating cash flow and debt-service capacity.
Commitment and availability
The full facility may not equal the amount available today
Current availability can depend on outstanding draws, eligible collateral, reserves, performance, and other agreement conditions.
- Understand how eligible receivables and inventory are defined.
- Review concentration, aging, dilution, and reserve provisions when applicable.
- Confirm how frequently reporting affects availability.
- Know whether repaid amounts can be drawn again.
Size the need
Build the request from the operating cycle
A practical request connects historic performance, collection timing, seasonality, growth, and required liquidity.
Measure the cycle
Review monthly revenue, customer terms, collections, inventory turnover, payroll, and vendor timing.
Test the peak need
Identify seasonal buildup, growth periods, slower collections, and the minimum liquidity the business must retain.
Manage after closing
Monitor collections, inventory, reporting, debt availability, and covenant performance together.
Align availability with the working capital cycle
Share the operating need, current financial information, and timing. We will review the relevant financing paths.
Financing is subject to application, underwriting, approval, eligibility requirements, and final documentation.