Funding business growth with working capital

Growth needs cash before it returns it

Almost every form of growth consumes cash in advance. Winning a bigger contract means buying stock and paying staff before the customer settles. Opening a second site means fit-out and deposits long before it trades. Hiring ahead of demand means payroll today for revenue next quarter. The opportunity is real, but it creates a funding gap between the spend and the payback.

Working capital finance exists to close that gap. Rather than waiting until retained profit slowly catches up — and watching rivals move first — you fund the growth now and repay as the new revenue lands. The judgement is whether the return clears the cost, and whether the timing works.

Working capital vs giving up equity

The classic alternative to borrowing is selling equity. Both fund growth, but they are not equivalent:

	Working capital	Equity
Ownership	Retained in full	Diluted permanently
Cost	Defined interest/fees	A share of all future profit
Speed	Days	Weeks to months
Control	You keep it	Often shared

For most established, profitable companies funding a clear operational opportunity, debt is the cheaper and faster tool — you pay a known cost and keep every share. Equity earns its place for deep, uncertain, long-horizon bets, not for funding stock or a confirmed order.

Match the facility to the opportunity

The right product depends on the shape of the spend:

• One-off, defined cost (a fit-out, a marketing push) — a fixed-term business loan with predictable repayments.
• Recurring or unpredictable needs (stock cycles, staged hiring) — a revolving facility like Credicorp Flex, where you draw and repay as you go.
• Equipment or vehicles — asset finance, which spreads the cost over the asset's life.
• Growth held back by slow-paying customers — invoice finance to unlock cash already earned.

Matching the term to the payback keeps repayments comfortable and stops short-term borrowing funding long-term assets — a common, costly mismatch.

Borrow within affordability

Disciplined growth borrowing starts with a forecast, not a wish. Before drawing down, model the new revenue conservatively and stress-test it: can the company still service repayments if the uplift arrives late or comes in smaller than hoped? A sensible rule is that the growth should comfortably cover the cost of the finance with room to spare, not depend on a best case.

Our guide on calculating affordability sets out the numbers underwriters look at. Borrow against contracts and demand you can evidence, keep a cash buffer for the unexpected, and size the facility to the opportunity in front of you — not the largest sum on offer.

What lenders look for in a growth case

A strong application makes the lender's job easy. Be ready to show:

• The purpose — exactly what the money funds and the expected return.
• Trading evidence — recent bank statements and accounts showing the base business is sound.
• A forecast — how the growth and repayments play out over the term.
• Order or pipeline evidence — contracts, recurring revenue or demand data that de-risks the case.

Because Credicorp lends to the company rather than the director, with no personal guarantee, the case rests on the business's own strength. A clear purpose, clean trading history and a credible forecast typically secure a decision in days. When you are ready, you can apply online.