Working Capital and Project Financing

Shortage of monies is only the symptom, never the root cause.

Working capital management is concerned with monitoring the cash flow of a business to ensure it has access to cash to finance its daily operations. Effective working capital management means manoeuvring the various aspects of the business to minimise cash that is tied up in the trade cycle.

Managing cash flow to keep up with working capital needs is a real concern of many growing businesses, especially when they are facing business difficulties or a business slowdown. With insufficient working capital, a business may go under if it is insolvent, although profitable. On the flip side, an unprofitable business may continue operating as long as it has sufficient cash to repay its borrowings when they are due. Businessmen should review their working capital and take precautionary measures well in advance.

Our Working Capital Improvement Programme is a systematic exercise that starts from a 'health check' on a business' current working capital needs and financing, and ends with assistance to strengthen the working capital. Though organised in modular format to facilitate clients' choice, we strongly recommend a thorough and holistic approach that starts from Module 1 and then progress to the subsequent modules if necessary.

Module 1 - Working Capital Health Check
Module 2 - Working Capital Improvement
Module 3 - Loans Restructuring & Obtaining Additional Facilities

At the end of the 3 modules, the entrepreneur will have his working capital requirements worked out and its management strengthened where necessary. Certain aspects of his business will also be adjusted to minimise working capital requirements. Through the process, the entrepreneur would have been imbibed with a better appreciation of effective working capital management, and is able to identify problems early.

Eligible companies may apply Enterprise Development Grant (EDG) from Enterprise Singapore to subsidise the consulting costs.

Project Financing

If you have recently secured a large project or are in the process of doing so, and you are worried of having insufficient funds or having your limited working capital drained and diverted to finance the project, you will need to seek project financing.

Alternatively, if the nature of your business is project-based and requires substantial cash outlay for the initial purchase of materials or mobilisation of a project team, you may like to explore project financing as one of your funding options.

Methodology

Our project financing methodology involves the following phases in helping clients get the appropriate funds for the project. Based on the expected operating results of the project, we will advise and assist in structuring a financing plan that meets both the project funding needs and the demands of the funding sources, within the limits of the company's financial capabilities.

Phase 1 - Working Capital Health Check and Additional Financing Requirements

• Conduct a quick health check of the company's existing working capital
• Compute the existing working capital needs
• Assist in project financial projections
• Compute the additional funds and incremental working capital required for the project

Phase 2 - Obtaining Additional Facilities

• Evaluate existing sources and types of financing
• Recommend the appropriate financing structure and arrangements
• Assist in preparing presentation materials / Information Memorandum
• Assist in negotiating and obtaining the required facilities

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