Calculate Working Capital

If a company takes all of its short-term assets (e.g. cash in the bank, receivables invoices, stock, etc) and pays all its short-term liabilities (e.g. suppliers, staff, etc) the remaining balance is their working capital position.  If the working capital position is positive, it is more than likely that the company is adequately capitalised and is self sufficient.  If however, the working capital position is negative, then the company needs to make up the difference by borrowing money or using some other source of working capital.  To calculate the working capital of a business, simply subtract its Current Liabilities from its Current Assets.

Working Capital = Current AssetsCurrent Liabilities

Knowing the working capital of a business will help to avoid unnecessary financial strain on the company.  Companies with insufficient working capital will invariably delay payments to suppliers, fail to pay staff salaries, delay tax payments and may ultimately lead to business failure and/or closure.   A useful measurement of the financial health of a business is its working capital ratio.  In a financially stable business, the working capital ratio will be above 2.

Working Capital Ratio = Current Assets / Current Liabilities

For example, a company with current assets of 100,000 and current liabilities of 40,000 has working capital of 60,000 and its working capital ratio is 2.5. Working capital ratios below 2 are an indication that there may be a potential financial problem.  A company with a working capital ratios below 2 needs to address the issue swiftly by borrowing money or using some other source of working capital.

Finding your Current Assets & Current Liabilities

Go to your accounts system and print your Balance Sheet, or ask your accountant for a recent Balance Sheet. Current Assets is a standard heading on most Balance Sheets. There may be a Current Liabilities heading and if not, there should be a heading: Creditors – amount falling due within one year and this is your Current Liabilities.


Institutional Roadshow III Begins

Today Credebt Exchange® completed its initial Institutional Investor Roadshow in London.  From an initial panel of six UK banks, presentations were made to three.  The primary focus of the presentation was on risk and controls.  Initial reaction was positive with offers from two of the three banks expected before…

Low Cost Capital

Exchange Overview
Credebt Exchange® provides an unrivalled and unique form of Low Cost Capital specifically for organisations in the micro-medium business sector. The Exchange model is substantially different from any other type of traditional working capital/lending model. A summary of the principal differences is highlighted below:

  • Selling model, as opposed to a lending model
  • No liens & no personal guarantees
  • Low discount rates & no ‘face value’ charge
  • Access up to 90% of your invoices’ value quickly
  • Single Membership fee, regardless of volume
  • Payment terms can be greater than 90 days
  • Not required to sell all invoices/entire ‘book’
  • No long term contract & leave at any time
  • No ‘Debtor Concentration’ (i.e. no maximum value per Debtor)
  • Block trading & trade automation are possible
  • No retrospective, refactoring, or review fees
  • Simple, streamlined online reporting

Grow Your Business
If accessing your working capital quickly and easily is essential to growing your business, then Credebt Exchange® can help you access the capital ‘locked’ in your invoices now. We convert your invoices into Exchange Traded Receivables [ETR] for sale on the Exchange. ETR offer the best Low Cost Capital and most efficient cash flow solution in the market today.

Your Way
Credebt Exchange® Low Cost Capital uses a unique purchasing/true sale, legal assignment model. You are not borrowing money, you are selling your invoices/ETR. Selling your invoices/ETR dispenses with the onerous requirements associated with traditional lending. As a Member of the Exchange, you only sell what’s needed to meet your capital requirements.

Take Control Now
Take control of your cash flow today and apply for Membership by email using the form below. Priority applications can be processed online or by telephone on 01 799-5499

Low Cost Capital


2013-Q4 ETR Briefing

Exchange Traded Receivables [ETR], are invoices issued under Contract for goods and services supplied to investment quality† companies, or credit insured invoices from Investment Grade [IG] insurers. As at Q4, Credebt Exchange® held RPA of €4.3m, with €2.7m allocated during the quarter. The full spectrum of available ETR was utilised and all currency exposure was hedged.

Settled ETR totalled €1.9m during the period, representing 36% of all outstanding trades. There continues to be no delinquent ETR recorded to date. Overall market conditions are favourable, with strong growth expected for 2014.

2013-Q4 was the second quarter of trading for Credebt Exchange®. Total Debtors numbered 270+ with a total trade value of € 4.8m to date. Daily volume remained steady in excess of 1,300+. Highest single value trades were in October & December at an average of € 0.15m. Total current RSA are valued at € 15.1m+

Yield trend stabilised at an average of 3.75% during the quarter. Originator trading volumes continued on a slightly upward trend, with Investor demand slowing in December. Originator demand for 2014 will be strong. Additional capacity for RPA contracts of €10-15.0m are expected in Q1-2014, subject to Institutional Investor demand.

2013-Q4 ETR Briefing

† Investment quality is a combination of Investment Grade [IG] organisations & other credit worthy organisations, as determined by AIG and other credit rating providers, from time to time

How to use risk to your advantage

As explained in the previous article “It’s all about Risk…” you’ll now understand that larger organisations get preferential treatment from banks.  That’s the status quo and isn’t likely to change any time soon.  So what can you do to improve the banks perception of your business, so that you achieve ‘next best’ status?

The answer is to make sure you present your business as the ‘next best’ lowest possible risk.  This means you have to remove all possible negative ‘what if’ scenarios, wherever you can. What if these top two customers cancel their business with you? What if your cost of supplies increases unexpectedly?  What if a senior member of staff leaves? What if demand in your market declines suddenly?  And so on…

The more you think about all the risks that undermines the integrity and viability of your business, then you’re thinking like a banker.  Banks don’t like risk.  If you have given sufficient thought to the removal or reaction to risk, then you’re making it easier for them to lend to you.

It’s all about Risk

Once you understand risk, then you’ll begin to understand banks and how banking works.  Banks, investors, shareholders, managers, financial markets, brokers and other investment/lending professionals all learn about risk.  That’s not to say they necessarily understand risk in all its guises, but they must understand the principal that high risk is bad risk.

Think of it like parenting. Does a responsible parent leave a young child with the wild teenager next door, or do they leave the child with a mature, responsible adult? If you were a bank, who would you rather lend money to: an established, well managed, large company or the young start-up business (notice how inverting this speaks volumes: ‘up-start’)?

As a bank manager, if you are paid the same salary for lending to large companies as you were for lending to the up-starts (sorry, start-up), but were only promoted when the loan was repaid, who would you lend too?

Unless you’re being obstinate, the answer’s simple: the established, well managed, large company is less risky than the young start-up.  So they get the money first (and in most cases, at much lower cost too). Only after the large corporates market is satisfied, will banks look to the micro-medium sized, more risky market.

Low risk, high volume lending is more efficient and ‘safer’ than almost every type of other riskier lending to the micro-medium sized business.  That’s a simple fact of banking and isn’t likely to change any time soon.  So don’t get angry with your bank, if you were in their shoes, you’d probably use the same principal: low risk

Welcome to Credebt Exchange Blog

Credebt Exchange® enables service and goods providers to offer their invoices as Exchange Traded Receivables [ETR] for sale on the Exchange. These ETR are attractive to Investors and when purchased on the Exchange, this provides Alternative Working Capital to the Originator/seller. A key objective for Credebt Exchange® is to achieve rates that are comparable to, and preferably less than, other commercial finance lending rates. By selling ETR, the trading organisation is avoiding the need for loans and/or credit facilities by using the ETR to provide Alternative Working Capital

50+ Retail Investors

Today the Exchange received funds from it’s fiftieth Retail Investor.  Since the first date of trading on 4 July of his Year (see article: First RSA/RPA Trade Executed), achieving 50 Retail Investors demonstrates a strong appetite amongst the investment community for strong, short term cash-equivalents such as ETR….

2013-Q3 ETR Briefing

Exchange Traded Receivables [ETR] are invoices issued under Contract for goods and services supplied to investment quality† companies, or credit insured invoices from Investment Grade [IG] insurers. As at Q3, Credebt Exchange® held RPA of €3.2m, with €1.7m contributed during the quarter. The full spectrum of available ETR was utilised and all currency exposure was hedged

In September, Credebt Exchange® introduced Instalment ETR [i-ETR] with Standard & Poor’s AA- or X2A Long-Term rating. i-ETR are invoices under Contract payable on an instalment basis (e.g. insurance premiums/asset purchases)

2013-Q3 was the first quarter of trading for Credebt Exchange®. Debtor numbers to the end of September were circa 200. Daily volume rose sharply with total recorded trades in excess of 1,300+. Highest single value trades were in July and September at an average of € 0.4m. Current RSA valued at € 13.1m+

Yield continued to trend downwards during the quarter, reflective of prevailing deposit rates. Volume of Originator trading continued a steady trend upwards with Investor demand slowing in August and returning to steady growth in September. Outlook for Q4 is medium to strong with immediate, additional capacity for RPA contracts of €3-5.0m

2013-Q3 ETR Briefing

† Investment quality is a combination of Investment Grade [IG] organisations & other credit worthy organisations, as determined by AIG and other credit rating providers, from time to time

Unaffected by Seasonality

The Summer months tend to be the slowest for most Originators (and indeed Investors), however, August continues the steady growth experienced in Q2. The performance demonstrates that the initial Members of …

First RSA/RPA Trade Executed

Volume trading in Exchange Traded Receivables [ETR], has been strong using Revolving Sales Agreement [RSA] block and buy-out trades to increase market penetration. Little, or no, initial resistance in the market. Deals are delivering on Investor Revolving Purchase Agreement [RPA] …

Investor Demand

After only six weeks, Investor demand for Exchange Traded Receivables [ETR], is ahead of expectations and indications are that demand will continue into Q3 at a steady pace. This strong positive performance indicates that ETR placement and yield…

ETR OnRisk with AIG

Exchange Traded Receivables [ETR], officially went ‘OnRisk’ with AIG as finance trade, commercial risks attaching on an insurance contract with specific reference to the Master Agreement

Investor Road Show II

The second Investor & Intermediary road show concludes with a further 10 Intermediaries being appointed as agents for Credebt Exchange®. This brings the total number of…

Exchange Opens for Business

The first two Investors both confirmed their initial investments in ETR today. Both are deposit investments and the Buy rate commences on 25th February for an initial…….

Intermediary Growth

As the New Year starts the number of Intermediaries has grown substantially now that ETR have both capital and yield protection. The ETR Repurchase forms a central part of the Credebt Exchange®……

ETR Overview

Credebt Exchange® was founded in 2011, specifically to address two important issues in the economy: 1. liquidity in the micro-medium business sector; and 2. providing a strong, stable, cash equivalent alternative to bank deposits for Investors. Trading commenced in July, 2013 and Credebt Exchange® continues to deliver on its commitments to both businesses and Investors.

ETR Overview

The Investor’s yield is achieved by purchasing Exchange Traded Receivables [ETR] at a discount. As explained in the ETR Fact Sheet, ETR are invoices issued under Contract for goods and services supplied to investment quality companies or credit insured invoices from Investment Grade [IG] insurers. ETR provide Investors with:


  • ETR payable by investment quality companies
  • 100% ETR Repurchase (see AIG in the ETR Fact Sheet)
  • 4-Tier capital protection (see ETR Overview)


  • Using RPA, typical investment period is 1-Year revolving
  • Full or partial redemption available on request
  • No ‘break charges’ or early redemption fees

Tax Efficient

  • Significantly tax efficient for individuals with annual exemption
  • Subject to status, may be off-set against capital losses
  • Individual’s return taxed as a capital gain


  • Substantial increase on comparable bank deposit rates
  • Capital not committed for long periods, or years
  • Higher yield than alternative cash equivalents


Credit Insurance

Official credit insurance negotiations commenced on an exclusive basis with AIG today. Subject to the outcome of these negotiations ETR will be credit enhanced…

€ 5.0m Equity

Despite the ‘Frankenstorm’ followed by severe snow storms, this late evening telephone call from New York, confirmed the equity valuation of €5.0M.  Subject to due diligence, the Exchange …

Investor Road Show I

Today saw the completion of the initial Investor ‘mini road show’ and began with the first signed Investment Intermediary Agreement. This confirmation underpins the…

Master Agreement Drafted

After nine months of careful consideration, the first draft of the Master Agreement is finalised and ready for use by all Members of the Exchange. Its importance is central to the Exchange’s efficient and legal…

Investor Initiative Begins

Selection and marketing to the initial ‘Investor pool’ commenced today and is expected to continue throughout September into late October…

Strategic Partner Selection

Initial marketing to specific strategic partners commenced today ahead of the planned Investor initiative for September as the Exchange prepares to formally enter the market…

Automated Clearing

With the assistance of IBM® and the co-operation of Danske Bank, the decision to automate trade clearing has been agreed. The decision is based on the need for efficiency and security in the…

Debtor Marketing

Although Debtors are third-parties to trading on Credebt Exchange®, their co-operation, input and support is important to the ongoing success of the Exchange. Initial reactions are positive…

Volumes Exceed € 100.0m

Based on the results of initial marketing and in less than 20 days, € 100m of Exchange Traded Receivables [ETR], is available from the initial short list of Originators. Much in line with expectations, marketing will move to…

Originators Initiative Begins

Today, contacting Originators across all market segments and industry sectors commenced.  The primary objectives are to establish detailed and specific market information on the supply of ETR and…

Quistclose Segregated Accounts

With the assistance of the Central Bank and Arthur Cox, Danske Bank formally agreed to operate quistclose segregated accounts services for Credebt Exchange® .  This protects Exchange Members…

Arthur Cox Appointed

After many months of careful selection, Arthur Cox has been selected as legal advisors to Credebt Exchange®.  As one of Ireland’s leading law firms…

Strategy Agreed

The three strand market strategy was finalised today by the interim executive committee.  Resulting from this, several strategic appointments were agreed…

Deloitte appointed

Today, Deloitte were appointed to provide audit, financial advice, risk management, tax services and trading system validation services to Credebt Exchange® Limited …

First System Release

The first Credebt Exchange® test system was delivered today with testing to commence early in July.  Security will be protected using Digi-Access™ two factor …

System Architecture

The overall architecture of Credebt Exchange® is finalised ready for production and line programming.  The system’s language, structure, design, flow and detailed specifications are all completed…

Development Commences

Continuing its research in parallel, the development of Credebt Exchange® begins with the emphasis on using an ECN with high-speed transactions, ease of use and military-grade security…

Research Commences

Credebt Exchange® market research begins by focusing on investment vehicles and strategies used by larger corporations using ECN and OTC fixed income markets…

Solving the Credit Issue

The founders of Credebt Exchange® commit to solving the issue using their business experience, their knowledge of the financial markets…

Credit Crisis Deepens

Founders of Credebt Exchange® continue to monitor the availability of credit, specifically as it relates to the Small & Medium Enterprise [SME] sector. The debt situation worsens