Working Capital Financing for Growing Businesses

Growth is positive, but rapid growth can create significant working capital requirements.

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A business may be profitable and have a strong pipeline while still needing additional cash to pay employees, purchase inventory, pay suppliers, start new projects, or fulfill customer orders before receiving payment.

 

Lirodean helps growing businesses identify working capital and credit solutions designed to support continued expansion.

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Why Does Growth Create Cash Flow Pressure?

Consider a company that wins several new contracts.

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The company may need to hire employees, purchase materials, increase inventory, and pay suppliers immediately.

Customers, however, may not pay for 30, 60, or even 90 days.

The faster the company grows, the larger this timing gap can become.

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How Can I Finance Business Growth?

Potential financing solutions include:

Business Line of Credit

A revolving credit facility can provide flexible access to working capital as business needs change.

Asset-Based Lending

Companies with significant accounts receivable, inventory, or other eligible assets may be able to obtain financing based on those assets.

Accounts Receivable Financing

Outstanding customer invoices may support additional liquidity.

Factoring

Factoring can help qualifying businesses convert receivables into cash sooner.

Purchase Order Financing

Companies with confirmed customer orders may be able to finance certain supplier costs required to fulfill those orders.

Equipment Financing

Equipment purchases may be financed separately, allowing the company to preserve working capital.

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How Much Working Capital Can My Business Qualify For?

There is no universal formula.

Potential financing capacity depends on factors such as:

• Revenue

• Cash flow

• Profitability

• Accounts receivable

• Inventory

• Existing debt

• Collateral

• Credit profile

• Industry

• Growth rate

• Financing purpose

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What if Traditional Bank Financing Isn’t Enough?

A growing company can sometimes outgrow its existing bank facility.

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Asset-based and alternative lenders may offer financing structures that place greater emphasis on accounts receivable, inventory, equipment, or other assets.

Lirodean evaluates both conventional and alternative financing options to identify structures appropriate for the business.

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Finance Your Next Stage of Growth

Running out of working capital should not be the reason a strong business has to turn down new opportunities.

If your company is growing and requires additional liquidity, Lirodean can help evaluate potential financing solutions.