Certainly we are all learning or re-learning the lessons of inflation, which plays havoc with balance sheets.
It is the impact on working capital as values of inventory and debtors increase that impinges on the amount of finance required, which can rapidly exceed agreed limits with banks. This is a case where Asset Based Lending products are a useful tool to adjust with the size of assets, not forgetting that overall facility limit may need upward revision.
If businesses suit these facilities it is worth market-testing for both the size and price of funding to ensure the best package is in place. I recently was able to make a significant cost saving for a construction client by considering alternative suppliers of this essential part of the financing toolkit.
Please get in touch if you would like to review your borrowing arrangements.