Working capital is often discussed as a single number, but the better question is how cash moves through the business. When does the company pay suppliers? When does it invoice? How long do customers take to pay? What cash is tied up in inventory, contracts, retainage, or a new operating location?
Those answers shape the financing structure. A short-term cash gap may call for a revolving facility. Equipment that will serve the business for years may be better suited to term financing. A long-term growth opportunity should not be funded with debt that requires repayment before the business receives the benefit.
Monty’s view: Match the term of the financing to the life of the asset or opportunity. That keeps a temporary cash requirement from becoming a permanent pressure point.
Review the working-capital structure behind your growth plan.