Working Capital (Liquidity and Guarantees)

Solid working capital financing that is customised according to the specific business cycles secures the liquidity of a company at any time. In fact, CFOs commit - on average - one third of their work schedule for liquidity management. The allocation of this management attention is disproportional to the degree of optimisation of the financing structure and the accounts receivable and turnover ratio of a company.

Financing Products

Several instruments can be taken into account for working capital financing:

  • Basic credit line for financing of temporary liquidity needs
  • Money market credits with maturities ranging from one month to one year for the financing of core availment
  • Supply chain finance programs for efficient utilisation of the credit Rating of customers and refinancing of accounts receivable
  • Public funding programs for liquidity management
  • Guarantees and trade finance instruments such as letters of credit
  • Bills of exchange, Factoring or true sale asset-backed security programs (ABS) for the optimisation of balance sheet structures

Cash turnover ratio

Moreover the working capital financing can be improved via an acceleration of the cash turnover ratio in the company. Therefore three relevant ratios have to be integrated in the management information system:

  • Average period of storage
  • Average time for payment of accounts receivable
  • Average time for payment of accounts payable

The Cash turnover is defined as:

Period of storage + Time for payment of accounts receivable - Time for payment of accounts payable
Cash turnover

A shortening of the balance sheet total is achieved by a reduction of the cash turnover ratio. This implies an improvement in the internal rating systems of banks - similar to the application of factoring.

Preparation of Banking Memorandum

IPONTIX analyses the financing needs according to the business and financial planning of its clients, and structures an adequate working capital financing. This is documented in a banking memorandum which covers all facts that are decisive for the internal decision-making process of financiers and which facilitates a fast decision-making process.

Financing Process

IPONTIX delivers an individually selected Long List of potential national and international financiers, approaches these financiers and manages the financing process until Signing.