Working capital is the money your company needs to run normal operations: buying stock, paying staff, settling supplier invoices and covering overheads between sales. When working capital is tight, even a busy, profitable business can feel constantly squeezed.
Why working capital runs short
It is usually a cycle problem. You pay for materials and labour upfront, deliver the product or service, then wait to be paid. The longer that cycle, the more cash you need tied up in it just to keep trading at the same level. Growth makes this worse before it makes it better, because more orders mean more upfront cost.
How a facility helps
- Smooths the gap between paying costs and collecting revenue.
- Lets you take on larger orders without starving the rest of the business of cash.
- Keeps supplier relationships healthy by paying on time, sometimes unlocking early-settlement terms.
Borrow to the cycle, not beyond it
Working capital finance works best when it is sized to your trading cycle and repaid as cash comes back in. You repay over your agreed term at the rate shown in your offer. Avoid using short-term working capital funding to buy long-term assets; match the finance to the job it is doing.
Credicorp lends only to UK limited companies and LLPs for business purposes. We do not lend to individuals or sole traders and take no personal guarantees from directors. As an exempt lender we are outside the FCA consumer-credit regime, so the Financial Ombudsman Service and FSCS do not apply.
See also: Using Flex to manage supplier and stock costs, Funding stock purchases ahead of a busy period and Funding for restaurants and cafés.