Working Capital Is Becoming a Priced Portfolio for CFOs

The next frontier in working capital management isn’t squeezing another day out of receivables or stretching another day of payables. It’s deciding whether those dollars should be financed the same way at all.

Two companies can report identical working capital requirements while sitting on different pools of risk. One may hold short-dated receivables from investment-grade customers and fast-moving inventory. Another may have disputed invoices, slow-moving stock and suppliers demanding accelerated payment.

A $10 million receivable from a reliable customer, $10 million of inventory and a $10 million supplier obligation may look equivalent inside the cash conversion cycle, but they carry different risks, durations and information. As a result, banks are bringing lending and treasury closer together. An example is the decision this month by First Citizens Bank to bring together its factoring, asset-based lending, supply chain finance, international factoring and receivables purchasing businesses into one group called Working Capital Finance.

Savvy chief financial officers can assign different costs of capital to different pieces of the operating balance sheet, turning working capital from a ratio to optimize into a portfolio to price.

See also: The Finance Stack’s Great Unbundling Has CFOs Asking What They Need to Own

Treasury Data Is Becoming an Underwriting Asset for CFOs

The most consequential change is not the proliferation of financing products. Factoring and asset-based lending are hardly new. What is changing is the information available around them.

Historically, corporate lending often operated through snapshots. A lender received financial statements, borrowing-base certificates, aging reports and periodic collateral valuations. But a more connected finance stack can provide something closer to a moving picture.

Today’s treasury systems, ERP platforms and payments infrastructure contain live signals about invoice approval, customer payment behavior, inventory movement, supplier obligations and expected cash flows. That allows financing to be tied more closely to what is actually happening inside the business.

The PYMNTS Intelligence report “Time to Cash™: A New Measure of Business Resilience” found in October that 77.9% of CFOs see improving the cash flow cycle as “very or extremely important” to their strategy in the year ahead.

That creates a link between operational discipline and funding economics. Better invoicing, reconciliation, forecasting and treasury visibility are no longer merely efficiency projects. They can improve the financeability of operating assets themselves.

Separate PYMNTS Intelligence data found that 4 in 5 middle-market firms using external working capital solutions freed an average of $19 million in 2025, money redirected toward supplier relationships and growth rather than held in reserve. That discipline extends inside the business too. Companies that accelerate receivables, improve inventory visibility and manage supplier payments strategically are not merely polishing their balance sheets. They are increasing the number of choices available to management.

Read also: The $100 Million CFO Doesn’t Keep Score. They Call the Plays.

The Corporate Revolver Is Losing Its Default Status

Banks that can combine lending with treasury data have an advantage. They can potentially see the asset and the cash behavior surrounding it. FinTechs can compete by specializing in narrower asset classes, underwriting faster or creating better data connections into ERP and payment systems.

The only loser might be the corporate revolver, which has traditionally served as a catch-all liquidity instrument. It is flexible, familiar and valuable precisely because companies do not need to determine which individual operating need caused the draw. But convenience can obscure pricing, and if a company borrows broadly against its own balance sheet to finance a pool of highly predictable receivables, it may be using flexible corporate credit to fund assets that could support cheaper capital independently.

A company that improves days sales outstanding by three days may still be leaving money on the table if it finances the remaining receivables inefficiently. Likewise, extending supplier terms can cosmetically improve working capital while simply transferring financing costs into the supply chain, where they may eventually return through pricing.

The implication is easy to miss. Working capital does not have one natural cost of capital; it has many. That is resulting in a more granular question for CFOs. Instead of asking how much liquidity the business needs, they can ask what each dollar of liquidity should cost.

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