WorkingCapitalQuote

A WorkingCapitalQuote is a formal quotation issued by lenders or financing providers that outlines a proposed amount of working capital available to a business for a defined period. It is used to address short-term liquidity needs arising from gaps between cash inflows and outflows. The quote is preliminary and not a binding loan until underwriting and acceptance occur.

Generation and content: The quote is prepared after reviewing financial statements, cash flow forecasts, inventory levels, and supplier terms. It specifies facility type (revolving credit, bridge, or invoice financing), the proposed amount, expected usage, interest rate, fees, and repayment terms. It may also state covenants or collateral requirements and whether the quote is unconditional or subject to underwriting.

Usage and interpretation: A WorkingCapitalQuote helps management compare financing options, plan liquidity, and estimate funding costs. It serves as a basis for negotiating a final agreement, which may differ in amount or terms after full underwriting. The quote can be updated as business conditions change.

Limitations: A quote is an estimate that depends on current information and market conditions. It can expire or be withdrawn, and it becomes binding only when a formal loan agreement is signed and all conditions are met.

See also: working capital, lines of credit, invoice financing, factoring, bridge loan, term sheet.