Revenue grew 38%. The overdraft grew faster.

Growth consumes cash before it produces any. There is an arithmetic that says how much, and how fast a business can grow without external funding.

By Steve 5 min read
Abstract bridge artwork for Revenue grew 38%. The overdraft grew faster.

A business wins more work, delivers it, invoices it, and finds itself with less money in the bank than it had before. Nothing has gone wrong. The margin held. The customers paid roughly on time. And yet the facility is closer to its limit at 38% growth than it was at flat. This is one of the few genuinely counterintuitive things in business finance, and it catches out competent operators repeatedly, because every instinct says growth is the solution to a cash problem. For a business with meaningful working capital…

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Important: General information only. Rialto Bridge articles describe patterns and considerations that may apply to a business; they are not financial, legal, tax or accounting advice, and they take no account of your particular circumstances. Consider your own situation and seek advice from a qualified professional before acting.

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