Raising Working Capital

Description

If your cash position is already critical — payment default, a winding-up threat, or under ninety days of runway — this is the wrong Playbook. Navigating a Cash Crisis assumes the urgency this one doesn’t.

Two facilities with the same advertised rate can differ by tens of thousands in real cost.

Working capital finance is one of the most mispriced decisions an SMB operator makes, and it’s mispriced in a specific way: operators shop on headline rate and close on relationship, when the decision should turn on structure — repayment profile, security taken, covenant load, total cost — matched against the actual shape of the cash gap the business is trying to close. The difference is invisible until you know where to look.

What you’ll have at the end of eight weeks

A signed term sheet or facility agreement for an instrument you selected deliberately from the full menu, rather than the first one that reached you. Priced on total cost, not headline rate. Sized against your real cash conversion cycle. With security and covenants you negotiated rather than accepted as given — and a fit you can defend to a co-founder, a board, or your own future self in eighteen months.

The six chapters

1. The Financing Menu, Read Straight — the full menu, UK and US: overdraft and line of credit through invoice finance, ABL, term loans, trade finance, revenue-based finance, MCA, and embedded lending
2. The True Cost of Capital — converting any offer, in any pricing convention, to one comparable effective APR
3. Reading Your Own Cash Conversion Cycle — structural versus seasonal gaps, and sizing a facility with the arithmetic to defend it
4. Building the Diligence Package — the core pack every lender asks for, assembled once rather than reactively
5. Running the Process: Longlist to Term Sheet — building a lender longlist, reading a term sheet, negotiating rather than accepting
6. Closing: Structure, Covenants, and the First 90 Days — facility agreement review, covenant traps, security, and the first ninety days live

The seven tools

True-Cost Comparison Model · Cash Conversion Cycle Worksheet · Facility Sizing Calculator · Diligence Pack Checklist · Lender Longlist and Outreach Tracker · Term Sheet Comparison Matrix · Covenant Monitoring Tracker. Spreadsheets and templates you build and use across Weeks 3 to 6 — nothing beyond a standard spreadsheet package required.

UK and US, in one place

Where the mechanics diverge — overdraft versus line of credit, invoice discounting versus non-notification factoring, personal guarantee versus guaranty — the divergence is flagged inline, at the point it matters, not exiled to an appendix. Two worked examples run throughout: Thornbury & Co in the UK, Meridian Fulfillment in the US.

Who it’s for

The founder, finance lead, or operations lead of a UK or US SMB, roughly £500k–£15m or $750k–$20m turnover — small enough that no treasury function is doing this for you, large enough that facility size and structure genuinely matter. Assumes two to four hours a week across eight weeks. You don’t need to become a treasury professional; this builds only the competence the decision in front of you requires.

Three ways in. Sourcing for the first time: work it in order. Already holding an offer you’re tempted to accept: go straight to Chapters 2 and 5, run it through the True-Cost model and the Term Sheet matrix, then decide. Refinancing: start at Chapter 3, because a facility that fit two years ago isn’t assumed to still fit.

What it doesn’t cover

Equity capital, grant funding, and personal lending against business assets are all out of scope. It doesn’t replace legal advice on the facility agreement — Chapter 6 tells you what to look for and what to push back on, but the signature is yours and your solicitor’s.

Format

Roughly 13,000 words. One-time purchase — yours to keep, and built to be returned to at the next review or refinance rather than read once.