Current Assets A Way To Accelerate Business Growth. | Business Loan


Current assets and their shortage are an essential factor faced by practically every Latvian company in carrying out economic activities. Unless you are a 100% prepayment retailer, you are in a situation where you have to pay suppliers for supplies of raw materials, service providers for utility bills, employees for work done, timely taxes, all of which are current assets , in turn, sales revenue from the sale of the product produced will only be generated over time. How long can it be that current assets and their circulation have a positive impact on a company’s business? – it depends on a number of factors: the production cycle, the terms of payment with the final buyer or wholesaler and, of course, the discipline of the debtors.

For example, if you ship your products to supermarket chains, you will normally be offered postpay within 30 to 60 days, while suppliers, especially foreign companies, will usually require a 100% prepayment. In this case, the working capital must be financed from the capital of the company or raised from outside. If the specifics of production technology are such that it takes weeks or even months to produce a product or service – often the resources invested in the production cycle are only profitable after 3 to 6 months or even longer and the company is experiencing a shortage of working capital. What to do? Good Finance solutions will offer the best option for financing working capital with loan companies or raising finance for company capital. 

Current assets and their effective financing are key to the success of a company

Current assets and their effective financing are key to the success of a company

It is good if the company is stable and grows gradually, steadily increasing production, relying solely on its own internal resources – current assets, provided that its operations are not affected by seasonality and other external circumstances, but that debtors pay on time. However, such an ideal situation is rather the rare exception. In practice, current assets and their scarcity and need for funding are influenced by many different objective factors, including:

  • long production cycle and low profit margin (or profitability), which prevents the necessary working capital accumulation in the short term;
  • seasonality factor;
  • long delivery time of raw materials and / or finished products;
  • long post-payment period.

In addition, there may also be unexpected circumstances in which a shortage of working capital arises unexpectedly and needs to be resolved just as quickly, otherwise there is a risk of loss or even loss of a good customer or prospective outlet. One of the most common and painful reasons to raise working capital financing is a new order that the manufacturer is unable to fulfill because he cannot afford due to a lack of working capital. Other adverse events that may cause an unexpected and acute need for working capital are, for example:

  • damage to production equipment, machinery or vehicles;
  • late payments from major debtors;
  • rise in raw material prices, etc.

Undoubtedly, as one of the possible solutions, the entrepreneur thinks of attracting bank financing to finance working capital. However, there are times in the past when banks provided loans to entrepreneurs as a lifeline for almost everyone and mainly for working capital financing. Even if you are ready to mortgage real estate, the credit institution will carefully evaluate you and your business capacity. Due to tighter supervision of the banking sector, as well as the banks’ own prudent credit policies in the post-crisis period, consideration of the application for “Working Capital” will take time and may result in denials, especially if:

  • the company is new, does not have a positive credit history and has no historically verified, demonstrable income;
  • there have been negative credit history in the past;
  • the product manufactured is specific or the outlet is too narrow;
  • from the subjective point of view of the bank specialists, the company operates in high risk conditions;
  • the collateral is inadequate, difficult to assess or lacks a self-investment.

Good Finance Financing “Working Capital” offers a friendly and reliable alternative to raise finance or credit for businesses. We will save you time and therefore resources! Why Good Finance Funding for “Working Capital”?

Good Finance Financing "Working Capital" offers a friendly and reliable alternative to raise finance or credit for businesses. We will save you time and therefore resources! Why Good Finance Funding for "Working Capital"?

  • the best credit specialists and the individual approach – there are no sectors or situations where the provision of “Working Capital” financing is denied unless the need for credit and the potential for development are justified;
  • Working capital financing simple and at no extra cost – all you have to do is fill out an online application and send it electronically without having to pay for an application;
  • Quick review of Working Capital Funding – by submitting all necessary documents, the decision is made within one business day and depending on which bank you have a current account with, you will receive the money on the same or the next business day;
  • Depending on the specific situation, the Collateral may not be required or at a reduced amount;
  • longer working hours and free credit specialist consultation by phone or email;

Working capital financing has friendly interest rates:

  • flexible loan term;
  • there are no penalties for early repayment;
  • the possibility of granting a credit holiday at an interest-only rate;
  • discounts for loyal customers.