Is cash quietly becoming the hardest problem sitting on the finance team’s desk?
For decades working capital was something a finance director looked at four times a year and promptly ignored. Times have changed. Interest rates are higher than they’ve been in years. Customers take longer to pay than they say they will. And the difference between those two truths has become a real problem.
And here’s the part that stings…
Financing your way out of that gap is getting expensive. Deloitte’s latest research reveals UK finance chiefs are least confident in six years, with interest rates and cost of financing high on their agenda of concerns.
So finance teams are changing how they think about cash.
What you’ll take away:
- Why Working Capital Moved To The Top Of The Agenda
- The Hidden Cost Of Slow-Moving Cash
- Squeezing More From The Cash You Already Have
- Where Short-Term Secured Funding Fits
- Building A Plan That Survives A Bad Quarter
Why Working Capital Moved To The Top Of The Agenda?
Easy money meant a shaky cash cycle wasn’t painful. A company could fund a slow month on overdraft fees and barely notice the interest.
That maths has flipped.
Cost control is the number one balance sheet issue facing most large UK businesses. 56% of CFOs have cost optimisation in their top five objectives for the year and yet 74% of CFOs say that debt is expensive when compared to historic norms. This is despite the Bank of England reducing the base rate.
Which leaves one obvious solution: leverage the cash you already have in the business.
Which is also why short-term secured finance solutions remain firmly on board agendas. Closed bridging loans are short-term facilities with a fixed agreed repayment date – typically secured against property. Specialist bridging lenders offering short-term bridge loans across the UK will establish that exit date at the outset, and it’s that certainty which makes a closed bridging loan much easier to price – and therefore generally cheaper – than an open-ended facility with no defined exit strategy.
The Hidden Cost Of Slow-Moving Cash
Here’s something most businesses underestimate…
Every day a bill remains unpaid, the company is giving the customer an interest-free loan. At 1% cost of funds, that was kind of annoying. At current rates, that’s a line item.
UK SMEs waited an average of 29.3 days to be paid in June 2026. A significant portion of that was past the original payment terms. Apply that across an entire sales ledger and the figure soon becomes obscene.
Slow cash creates three problems at the same time:
- It costs interest — because the gap has to be funded by borrowing.
- Eliminates choices — cash that is trapped in the ledger cannot be used to fund expansion.
- Mask weakness — just because there is cash doesn’t mean the business is healthy. A healthy profit line can sit on top of a broken cash cycle.
Profit is just an opinion. Cash is reality. CFOs who believe those two statements are equal will be disappointed.
Squeezing More From The Cash You Already Have
The good news? Most companies have way more spare cash than they think. They just have it tied up in the wrong places.
1. Tighten Up Receivables
Chasing invoices is dull work, but it’s the cheapest funding available anywhere.
Agree payment terms upfront, not after the sale. Invoice on the day the work is completed. Chase automatically rather than waiting for someone to remember. Companies that automate their invoicing/dunning processes consistently receive payment faster than those who don’t.
Don’t be afraid to run credit checks. If they can’t pay, they’re not your customer. They’re an unauthorized loan.
2. Rethink Supplier Terms
Payment terms cut both ways.
When suppliers are paid in 14 days and customers in 45, the business is financing 31 days worth of its own operation. Closing even a portion of that gap releases cash and doesn’t require a loan.
Do it fairly though. Predatory pricing smaller suppliers to death creates a supply chain issue that ends up costing way more than the interest.
3. Clean Up Inventory
Stock is cash wearing a disguise.
Lines that move slowly, buying extra “just in case” and safety stock… these all silently consume working capital. Examining what sells and how quickly will likely free up more cash than any fancy financing product.
Where Short-Term Secured Funding Fits?
Occasionally the gap cannot be bridged internally. Land closes on a property sale late. You need bridge funding before the first installment on a big contract.
That’s the moment bridging finance becomes useful.
Notice how many things the word “closed” implies. A closed facility has an exit point that has been signed and delivered — whether that be a sale, refinance agreement or contracted payment date. Since the lender already knows how and when they will be repaid, the risk is diminished and pricing typically follows.
A closed bridging loan tends to make sense when:
- The exit is confirmed, not hoped for
- The need is genuinely short-term, measured in months
- Speed matters more than the headline rate
- There’s an asset available to secure the debt against
It’s the wrong tool when:
- The exit date is really just a guess
- The shortfall is permanent rather than temporary
- It’s being used to paper over a structural loss
Used properly, it’s a bridge. Used badly, it’s a very expensive plank.
Building A Plan That Survives A Bad Quarter
Here’s what separates the finance teams that sleep well from the ones that don’t…
They forecast cash on a weekly basis, not monthly. With a 13 week rolling cash forecast you see problems in time to do something about them. With a monthly report you see the same problems after they’ve occurred.
They stress test appropriately, too. What if the largest customer pays 30 days late? What if rates rise another half a point? By running these scenarios in advance, you take a crisis and make it a decision.
They secure financing in advance. The absolute worst time to negotiate credit is the week you need it. Facilities that are agreed upon when the skies are blue are less expensive and much less stressful than those you begged for at the eleventh hour.
One more thing worth saying…
Working capital is not a treasury issue. It is a corporate issue. Sales defines payment terms. Operations defines stock levels. Finance just gets to announce the consequences. The companies winning are the ones where cash responsibility resides with all.
Tying It All Together
Working capital used to be housekeeping. Now it’s strategy.
High rates have flipped the math on everything – sluggish invoices, inflated inventory, overly generous vendor terms. Every single one has a real cost these days and it’s reported on the interest expense line.
The finance teams handling it best are doing three things:
- Collecting faster and paying smarter
- Releasing the cash that’s trapped in stock and process
- Keeping short-term funding options ready before they’re needed
None of this is complex. It simply needs to be repeated quarter after quarter. And in this environment where capital is costly and confidence is low, that sort of discipline is more valuable than any one individual transaction, no matter how creative.
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