Raising Finance through Working Capital Finance Solutions.

What is Working Capital Finance?

Working capital finance is a type of business financing that allows businesses to borrow against their unpaid invoices, business assets or other forms of working capital. It is used by businesses to raise cash, to improve cash flow to cover financing day-to-day expenses, such as inventory, payroll, and accounts payable. It is often used by businesses that have seasonal fluctuations in their cash flow, or by businesses that are growing rapidly and need additional funding to support their expansion.

How can your business use Working Capital Finance?

Working Capital Finance can be used for the same purposes as any other form of Raising Finance. It is particularly useful for funding up-front costs, for example:

Funding inventory purchases: Businesses often need to purchase inventory upfront before they can sell it to customers. Working capital finance can be used to bridge the gap between paying for inventory and receiving cash from sales.

Paying for marketing and advertising: Businesses often need to invest in marketing and advertising to acquire new customers. Working capital finance can be used to cover these upfront costs.

Expand their operations: Working capital finance can help businesses to expand their operations by funding new investments in inventory, equipment, or marketing. before the growth in sales receipts is realised.

Taking on new contracts: Businesses that are taking on new contracts often need additional working capital to cover the costs of increased production or staffing. Working capital finance can help businesses to take on new business without having to wait until they have the cash on hand.

Investing in new equipment: Businesses that are investing in new equipment often need additional working capital to cover the upfront costs.

Working capital finance can be a lifesaver for businesses that are facing unexpected costs. It can help businesses to avoid disruptions to their operations and maintain their financial stability.

Sudden changes in the market: Working capital finance can help businesses to cover unexpected expenses, such as a sudden increase in demand or a supplier payment that is delayed.

To cover damages: Broken equipment, accidental storm damage; these sort of unexpected events can put a real strain on business finance. Working Capital Finance can be used to smooth over unexpected rough patches.

What are the benefits of using Working Capital Finance to raise finance?

The benefits of arranging working capital include:

Up to 90% of outstanding invoice value can be advanced within 24 hours;
Flexible lending – funding increases in line with your growth (UK and Export);
Confidentiality – lenders can offer a completely confidential service – your customers need not know you have a facility in place;
Lenders allow you to manage your funding at all times;
Sector-specific finance is often available;
Structured ABL – funding for management buy-outs/management buy-ins;
Trade Finance & Supply Chain Finance Solutions.

Types of Working Capital Finance

The world of commercial finance and asset-based lending (ABL) is complex and expansive with products, terminology and contractual interpretation varying from lender to lender.

Specialists in this area can advise on:

Invoice Finance - an effective way of quickly accessing a proportion of the value (up to 90%) of your invoices. Effectively, a business ‘sells’ its invoices to the lender in return for accessing cash at the point products and services are sold. Specific sector-based offerings are available, as is the ability to arrange finance for selected invoices only.
Structured ABL - generate a higher level of funding by unlocking the maximum value tied up in the combined assets within your business, including Debtors, Inventory, Plant & Machinery and Property. Additional forms of funding can be structured in addition to this, such as top-up loans in order to drive growth.
Trade Finance - supply chain finance with various options, enabling the purchasing of goods from overseas where you are otherwise unable to obtain credit from suppliers.

How do I go about raising Working Capital Finance?

When choosing a working capital finance option, it is important to consider the specific needs of your business. Some factors to consider include the amount of money you need, the length of time you need the money for, and your creditworthiness.

Typically, you will need:

Business plan: Lenders will want to see that you have a well-thought-out business plan that outlines your goals and how you plan to use the working capital finance.

Financial statements: Lenders will want to see your financial statements so that they can assess your creditworthiness and risk. Typically, you will need to ensure that your management accounts are up to date, you make available current detailed lists of debtors and creditors, and you might need to provide up-to-date projections before an expert will consider your application.

How can Wood and Disney help you raise Working Capital Finance?

Getting the right loan involves more than just completing an application. Successfully raising funding for your business needs planning and preparation and the right choice of lender. Fortunately Wood and Disney are expert at raising finance through Working Capital Finance.

You can start by finding out more about how Wood and Disney approach raising finance on our dedicated "Raising Finance Solutions" page. There we talk in more detail about the The three stages to successfully raising finance:

PLANNING: Know how much funding you require and the type of funding.

APPLYING - YOUR PITCH: Have a business plan backed up by accurate facts and figures - you need to be credible.

SECURING FINANCE: Choose the right investor or source of funding that will look favourably upon your proposal.

We support you throughout the application process and ensure you have easy access to the right finance at the most advantageous rates.

Please talk to us about finance - our working capital finance experts have many years of experience and success in advising businesses across a wide range of sectors in obtaining working capital finance solutions. We can help you find a specialist to help you find the right solution for your business.

If you're ready to talk through how Wood and Disney can help you Raise Finance then why not give us a call on 01206 233170 or fill in the contact form below and we'll get back to you.