Survey findings highlight four key consequences for working capital. Reduced liquidity headroom is the most immediate impact, cited by about one third of businesses, followed by ongoing challenges in cash flow planning, and rising financing needs. Limited investment further reflects how constrained liquidity is beginning to affect longer term decisions. These trends also point to a greater use of trade credit as firms seek to sustain sales.
With higher financing needs, companies are increasingly turning to external financing to bridge cash flow gaps. However, higher borrowing costs might make this more difficult, adding another layer of strain to already stretched balance sheets.
Ungaro highlights how these forces may further intensify liquidity struggles:
"The result is a cycle of pressure, where weaker customer credit quality, delayed payments, and rising financing needs reinforce each other. If interest rates rise in this depressed economic environment, the cost of accessing external funding will increase just as firms depend on it more, which risks deepening liquidity constraints rather than easing them."
For more information, visit https://group.atradius.com/knowledge-and-research
Press contact:
Pavel Gómez del Castillo | pavel.gomezdelcastillo@atradius.com
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