Why Is Working Capital a Strategic Issue Now?

Brazil's current economic environment — a double-digit Selic rate, inflation above the target ceiling, and tightening credit conditions — has pushed working capital management to the top of the agenda for mid-sized companies. Finance specialists say liquidity must be treated as a strategic variable, not a back-office treasury routine.

How Expensive Is Credit for Mid-Sized Businesses?

According to exclusive analysis by consultancy Safegold, subsidised credit lines run at around 13% per year, while free-market credit for mid-sized companies reaches 24–26% annually. Receivables-anticipation operations through factoring firms, securitisers, and FIDCs (credit-rights investment funds) can exceed 34% per year in effective cost.

What Happens When a Company Stretches Payment Terms?

Safegold modelled two scenarios for a company with R$ 120 million in annual revenue and a projected EBITDA margin of 12% (R$ 14.4 million), carrying financial costs indexed at 24% per year. When the average receivables period (DSO) stretches from 45 to 75 days, an extra R$ 10 million becomes tied up in assets. Carrying that additional capital burns R$ 2.4 million — equivalent to 16.7% of the company's entire annual EBITDA.

What Is the Risk of Relying on Receivables Discounting?

Ezequiel Wilbert, partner at Safegold, warns that companies financing their full operation through invoice discounting at 34% per year are unknowingly entering an 18-to-24-month window that precedes a solvency crisis. Ahmed El Khatib, coordinator of the Finance Studies Centre at FECAP, adds that continuous credit use reduces available cash flow, raises debt levels, and worsens key indicators such as interest coverage, financial leverage, and current liquidity.

What Should Companies Do?

Experts recommend shortening the cash conversion cycle — reducing the time money remains trapped in receivables or inventory — rather than simply reaching for cheap credit. The goal is to preserve margins and keep the balance sheet under control by the end of each operating cycle.

Key Facts:
  • Selic rate is in double digits; inflation is above the official target ceiling.
  • Free-market credit for mid-sized firms: 24–26% per year; FIDC/factoring: up to 34%+.
  • Subsidised lines: ~13% per year.
  • For a R$ 120 m revenue company, stretching DSO from 45 to 75 days erases 16.7% of annual EBITDA.
  • Safegold warns: companies dependent on 34% discounting may face a crisis within 18–24 months.
  • Source: Safegold analysis published exclusively in Valor Econômico; expert commentary from FECAP.