Funding a working capital gap

Find the lowest cash balance

Build a weekly timeline from order through delivery and collection. Record when suppliers require deposits, when staff are paid, when you can invoice, and when customers generally settle. Include VAT, tax payments and existing facility repayments. A signed order can improve revenue while increasing the need for cash.

A distributor pays £80,000 for stock and £12,000 for handling before invoicing its customer £115,000. If no cash arrives before the invoice settles, the order alone ties up £92,000. With £25,000 available after protecting normal running cash, the immediate gap is £67,000. Model late payment and a second overlapping order before choosing the facility limit.

Match the borrowing to the sales cycle

An invoice finance provider may advance a portion of eligible outstanding invoices. The actual availability depends on the agreement, including exclusions, debtor concentration, disputes and reserves. An unpaid stock deposit before the invoice exists can still require another source of cash. Compare the funding available at each point in the cycle and include service fees as well as the cost of drawing funds.

Build an evidence pack

List debtor ageing by customer, outstanding supplier terms, monthly inventory and current borrowing. Show which cash receipts repay each draw. A lender can then distinguish a recurring seasonal need from losses building up over time. Put the figures and missing documents in your funding brief. The market monitor provides broader credit-market context.