December 5, 2023

Empowering Entrepreneurs: Working Capital Financing Can Remove Stress of the Unexpected

Access to Working Capital Finance can help businesses focus on their operations and grow their business.

Empowering Entrepreneurs: Working Capital Financing Can Remove Stress of the Unexpected

Running a business can cause sleepless nights, often fueled by concerns around money and cash flow. Sudden drops in revenue due to seasonality, unexpected expenses that crop up at the worst time and getting the balance right between cash going out and cash coming in are a source of stress for many business owners. According to a report by CredibleX and Further Ventures, over 30% of small and medium-sized businesses in the UAE listed understanding of capital needs and options as one of their biggest challenges*.

Traditionally there were limited options for businesses to access capital - finding an investor, asking friends and family or getting a 3 year loan from the bank. This article will introduce you to another, more flexible option you can consider; Working Capital Finance.

What is Working Capital Finance?

Working Capital Finance is basically a short-term loan to make sure you have enough money to keep the business running smoothly on a daily basis. The loan term typically lasts from 1 to 12 months, with the duration chosen by the business when they apply.

 The objective of Working Capital Finance is to enable businesses to maintain steady cash flow and manage their finances more consistently. Working Capital Finance can also enable expansion and growth without impacting the business day-to-day operations and cash flow.

The loan application process is typically faster and more flexible than traditional financing options, and with innovative fintech solutions, such as that offered by Qashio and CredibleX, the application turnaround time can be reduced to a matter of days, enabling access to funds when companies need it most.

What are Some of the Headaches That Working Capital Finance Helps Remove?

Smoothing out the peaks and troughs of outgoing cash and incoming revenue

Pay your rent without the headache of “saving up” throughout the year

Rental payments can be one of the largest fixed cost items of an SME and can cause a strain on businesses as they try to grow or when times are tough.

Easily Handle Big Annual Expenses

Annual renewal of your team’s medical insurance, repairing equipment when it breaks or paying governmental fees. Keeping a reserve of cash for those large expenses means you’re not using that cash for growth.

Unlock Cash Tied Up in Inventory

The time between buying inventory and getting paid by customers can be months. That’s months of cash locked up in a supply chain that isn’t translating quickly enough into cash-in-the-bank.

Remove The Stress of Seasonality

Many businesses in our region suffer from big swings in revenue due to seasonality as the population escapes the summer heat. But business continues. Rent and salaries still need to be paid (and the AC still needs to stay on!)

In all of these examples, working capital financing can be another tool in your belt to use to make sure the engine of your business runs smoothly come rain or shine. With short payback times and repayment times up to you, you don’t need to commit to years of repayments or dilute equity and control by bringing on new investors.

Interested in learning more about how your business can benefit from CredibleX? Reach out to us at hello@crediblex.io

* Reference

From Small to Mighty: How Fintechs can fuel the UAE’s booming SMEs. Access the report here.

Disclaimer:The information provided herein, including any opinions, views, or recommendations expressed, is for informational purposes only and should not be construed as financial advice. Any investment or financial decision should be made after thorough research and consideration of your own financial situation and risk tolerance. We do not assume any responsibility for the accuracy, completeness, or timeliness of the information provided.

Sarah Bacon

Sarah Bacon

Chief Operating Officer

About the author.

Chief Operating Officer at CredibleX, has a wealth of experience in building businesses and projects from the ground up during her career.