Suppose a construction company in Singapore that’s juggling projects from high-rise apartments to infrastructure development is feeling the pinch of rising interest rates and unpredictable material costs. They need to manage cash flow to reduce costs and navigate shifts in the business cycle. Now suppose that navigation required extra capital — fast.
The scenario plays out all over the world every day. This hypothetical company is not alone. Mid-sized firms, often termed “growth corporates,” worldwide find that efficient management of working capital is essential for survival and growth.
No matter the industry, no matter the size of the company or market, enterprises need money on hand to keep day-to-day operations humming. But as Visa-commissioned reports from PYMNTS Intelligence have tracked through the past two years, through the twin editions of the Growth Corporates Working Capital Index, there are variations in regional use of working capital solutions and variations depending on industries, too.
The 1,297 chief financial officers and treasurers PYMNTS surveyed in 2024 helped steer the fortunes of middle-market firms with $50 million to $1 billion in annual revenue. As Chavi Jafa, senior vice president and head of Commercial and Money Movement Solutions, Asia Pacific at Visa, told Karen Webster, there’s optimism among mid-market firms. They want to use working capital to capitalize on growth opportunities.
“The lens we need to take is [offering] solutions for specific industry verticals,” Jafa said. “The needs of the manufacturing industry are different from the construction industry or eCommerce players.”
And the needs of Asia Pacific are different than the needs of Latin America. The index reveals differences in how growth corporates across the globe approach working capital, influenced by factors ranging from macroeconomic conditions to industry-specific challenges and the level of development of the financial ecosystem. As Webster and Jafa discussed, here’s a regional breakdown of some of the report’s key findings.
Asia Pacific (APAC): The region stands out with the highest growth in the use of working capital solutions. According to Jafa, this growth is driven by business cycles, rising interest rates and the increased availability of working capital from providers. Strategic use cases for working capital have increased by 45%. Manufacturing and construction companies in APAC have shown heightened awareness of working capital’s importance as they emerge from the pandemic.
However, they also face challenges, including a lack of personalized solutions and high costs of access. Many firms in the region also grapple with unpredictable cash flows, making it difficult to take advantage of early payment discounts. To improve this, Jafa said companies should enhance supplier relationships and use virtual cards for early payments. The use of corporate and virtual cards increased by 32% year over year in the region.
“What we did see was that a lot of the drivers where working capital became critical was where the demand grew,” Jafa said of APAC. “And we saw that it was so businesses could better manage their cash flow, reduce costs and invest in strategic initiatives.”
Europe: Europe, particularly within the healthcare sector, has a high adoption rate of external working capital solutions. Many of these companies use working capital to support growth, investments and sustainability initiatives. However, as Jafa pointed out, these companies also face unpredictability in financing needs, driven by economic volatility, geopolitical instability and supply chain disruptions.
“The cost of goods and services [can be difficult to predict] when you have significant changes in currency and inflation, which makes it very unpredictable for businesses,” Jafa said.
Access to supply chain financing and flexible solutions like virtual cards can be critical for mitigating risks, she said.
North America: The media and technology sector in North America presents a stark contrast to Europe, exhibiting less uncertainty about cash flow. Top performers in this region strategically use working capital rather than relying on it for emergencies, leading to better management of their financial needs. As Jafa told Webster, this strategic approach helps them reduce inventory carrying costs, secure supplier discounts and negotiate better interest rates with financial institutions.
These companies are also early adopters of flexible solutions like virtual cards. The study found that 86% of growth corporates in North America implemented at least one working capital solution in 2024, and globally, those top performers achieved an average of $11 million in bottom-line benefits.
Latin America and the Caribbean: The agriculture industry in Latin America and the Caribbean demonstrates high predictability in financing needs due to its seasonal nature.
“One of the things that helps with the predictability is tailoring financial products that align with the specific need of the industry and the cash flow cycle of that industry,” Jafa said, adding that these companies are more easily able to use external capital for strategic initiatives, such as expanding operations or entering new markets.
Digital tools are widely used in the region, and the integration of digital platforms with financial systems is critical for the sector.
Central Europe, Middle East and Africa (CEMEA): Retail and marketplace businesses in CEMEA show improvement in working capital efficiency, as reflected in a 26% increase in index scores.
However, the use of working capital solutions is lower compared to other regions. Jafa said this presents an opportunity for solution providers, who need to increase awareness about the benefits of working capital solutions and tailor their offerings to the unique needs of different industry verticals and markets in the region.
“One of the biggest areas where service providers and banks can focus on is education and awareness,” Jafa said, adding that the streamlining of application and approval processes, using digital platforms, and highlighting successful use cases can also boost the adoption of these solutions.
As Jafa told Webster, the Working Capital Index emphasizes the need for financial institutions to offer more personalized, industry-specific solutions that go beyond a one-size-fits-all approach. The demand for digitized and mobile-first solutions is also growing, influenced by the end consumers and the workforce. Artificial intelligence and other advanced technologies are seen as crucial for automating credit assessments and speeding up access to working capital.
Jafa said financial institutions are responding positively to the study’s findings, using them to educate their corporate clients and sales teams on the benefits of efficient working capital management.
“The industry vertical theme with tailored solutions has come to the fore, and it has become a very here-and-now conversation, which is very different, actually, from perhaps a couple of years ago,” Jafa said.
