Cash Positive?

17 Oct 2014

Demica News

In their drive for competitive advantage, treasurers are increasingly looking beyond traditional forms of finance to explore a wider range of alternative funding options that support their working capital requirements, ranging from trade receivables securitisation (TRS), supply chain finance to factoring.

The research, conducted in conjunction with Treasury Management International, reveals that more effective cash management/forecasting (63% respondents), releasing working capital (60%) and improving working capital risk management (58%) are the three most important priorities for surveyed treasurers in the coming year. 60% of respondents believed that there is still a fairly or very high potential for releasing trapped working capital in their industries in the next five years. In fact, the need to unlock trapped liquidity has become even more important in the post-crisis economic landscape as standard bank credit becomes more restricted and expensive. As a result, companies are increasingly looking for alternative financing methods, according to 80% of survey respondents.

Trade receivables securitisation is becoming an increasingly important component in corporates’ working capital strategy. 16% of respondents are currently running a TRS programme and amongst those that have not yet implemented a TRS programme, 25% are planning to do so in the next 12 months.

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