How Working Capital Finance Can Remove the Stress of the Unexpected - Business Financing in the UAE

Sarah Bacon – Chief Operating Officer at CredibleX

January 23rd, 2024

This article is the first in a series, in collaboration with the financing experts at CredibleX, designed to help UAE businesses identify the right type of financing strategy and solutions for their business. Whether you need access to finance to enable expansion or simply to balance your cash flow, we will guide you through the options available to you and help to pinpoint the right solution.

Running a business can cause sleepless nights, often fueled by concerns around money and cash flow. Sudden drops in revenue due to seasonality, unexpected expenses that crop up at the worst time and getting the balance right between cash going out and cash coming in are a source of stress for many business owners. According to a report by CredibleX and Further Ventures, over 30% of small and medium-sized businesses in the UAE listed understanding of capital needs and options as one of their biggest challenges*.

Traditionally there were limited options for businesses to access capital – finding an investor, asking friends and family or getting a 3 year loan from the bank. This article will introduce you to another, more flexible option you can consider; Working Capital Finance.

What is Working Capital Finance?

Working Capital Finance is basically a short-term loan to make sure you have enough money to keep the business running smoothly on a daily basis. The loan term typically lasts from 1 to 12 months, with the duration chosen by the business when they apply.

The objective of Working Capital Finance is to enable businesses to maintain steady cash flow and manage their finances more consistently. Working Capital Finance can also enable expansion and growth without impacting the business day-to-day operations and cash flow.

The loan application process is typically faster and more flexible than traditional financing options, and with innovative fintech solutions, such as that offered by Qashio and CredibleX, the application turnaround time can be reduced to a matter of days, enabling access to funds when companies need it most.

What are some of the headaches that working capital finance helps remove?

Smoothing out the peaks and troughs of outgoing cash and incoming revenue

1- Pay your rent without the headache of “saving up” throughout the year

Rental payments can be one of the largest fixed cost items of an SME and can cause a strain on businesses as they try to grow or when times are tough.

2- Easily handle big annual expenses

Annual renewal of your team’s medical insurance, repairing equipment when it breaks or paying governmental fees. Keeping a reserve of cash for those large expenses means you’re not using that cash for growth.

3- Unlock cash tied up in inventory

The time between buying inventory and getting paid by customers can be months. That’s months of cash locked up in a supply chain that isn’t translating quickly enough into cash-in-the-bank.

4- Remove the stress of seasonality

Many businesses in our region suffer from big swings in revenue due to seasonality as the population escapes the summer heat. But business continues. Rent and salaries still need to be paid (and the AC still needs to stay on!)

In all of these examples, working capital financing can be another tool in your belt to use to make sure the engine of your business runs smoothly come rain or shine. With short payback times and repayment times up to you, you don’t need to commit to years of repayments or dilute equity and control by bringing on new investors.

If you want to see how working capital finance could help your business, go to the Qashio Lending tab in your Qashio account and complete the 100% digital application. It takes less than 10 minutes and could change the game for your company. And help you sleep better at night! If you still don't have a Qashio account but want to explore a business financing, you can learn more about Qashio Financing on our website.

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