In Brief:

• Working capital and growth capital serve different purposes, but both directly impact your cash flow and overall financial performance.
• The real challenge isn’t necessarily accessing capital; it’s managing the cash flow that follows, especially during periods of growth.
• Treasury tools like lines of credit and electronic payables/receivables help improve visibility, timing, and control of cash.
• Combining lending and treasury within one banking relationship has many advantages, including stronger decision-making, operational efficiency, and more strategic growth.

Access to capital is a major milestone for any business… but not all capital serves the same purpose.

Whether supporting day-to-day operations or driving expansion, it’s important to understand the difference between working capital and growth capital. Both types have distinct roles for your business – and securing funding is just the first step.

So what should you do after you get business funding?

Businesses that take a more integrated approach to managing capital through treasury tools, clear visibility, and connected banking relationships are in the best position possible to generate predictable cash flow and long-term growth.

The Difference Between Working Capital and Growth Capital

In general, businesses rely on two types of funding:

• Working capital is for daily operations like payroll, inventory, rent, and other short-term expenses. It keeps your business running smoothly.
• Growth capital is used to expand, including hiring new people, purchasing equipment, launching into new markets, or scaling up production.

While both are crucial for your business, they don’t operate separately. The way each type of capital flows through your business directly affects your overall financial performance.

The Real Challenge: Managing Cash Flow After Funding

The biggest challenge for many businesses isn’t accessing capital; it’s actually managing the cash flow that follows.

This is especially true during periods of growth. 

“When we see small to mid-sized businesses in a growth cycle, as bankers we must stay in contact with them to ensure we can meet their new challenges and create further efficiencies so that the customer can focus on their business. We strive to provide thoughtful consultation to mitigate any worries about their core banking services,” says Brian Hintz, VP, Treasury for INB St. Louis.

Scaling operations usually requires more streamlined cash management practices, Brian notes.

“Moving toward electronic receivables and payables at scale always enhances the month-over-month cash flow of the business,” he shares. And when those improvements are paired with strong financial performance, additional opportunities open up.

“When we can identify those strong signals coming from our customer’s financial statements, we can offer even more capital to accelerate their business growth,” Brian says.

The Right Tools to Manage Cash Flow

Effective cash flow management means using the right structure and tools for your business.

Lending and treasury tools that play a crucial role include:

• Lines of credit. Providing flexible access to working capital, a line of credit helps businesses bridge timing gaps between receivables and payables.
• Operating and treasury accounts. These accounts enable businesses to manage incoming and outgoing cash efficiently, especially when paired with electronic payments and receivables.
• Electronic receivables and payables. Moving your payments and collections to digital services improves speed and accuracy, and strengthens your overall cash flow.

Together, these tools and practices give you the treasury strategy needed to control how cash moves, where it sits, and how it supports your business growth. 

That strategy becomes even more effective when lending and treasury are combined within a single banking relationship. 

Keeping loan proceeds and operating activity within one primary banking relationship creates a more complete financial picture, with proactive support.

“At INB, I always tell my clients it’s not just about getting a loan – it’s about what happens next,” says Cami Gibertini, SVP, Business Solutions for INB Tampa. “When those funds stay within our bank, we can see more, do more, and ultimately support our business clients at a higher level.”

Advantages of Centralizing Lending and Treasury

When businesses combine both lending and treasury at INB, they become more efficient and have more financial control.

“When lending and treasury are centralized, the bank sees the company’s full financial picture,” says Steve Keenan, INB’s Illinois Market President for Commercial Lending.

This leads to:

Visibility into daily cash position

“At INB, we see daily cash visibility as foundational to how businesses operate effectively,” Cami explains. 

When deposits, payments, and borrowing are all in one place, you get a real-time, accurate picture of your cash position, so you can make faster decisions and manage liquidity more strategically. 

“We can help optimize how cash moves, whether that’s minimizing idle balances, reducing borrowing needs, or structuring lines of credit more effectively,” Cami says.

Operational efficiency

Centralizing lending and treasury simplifies your day-to-day operations.

You save time and minimize mistakes when you have fewer platforms to manage and less back-and forth between your service providers. 

You also get easier access to other financial departments, such as wealth, mortgage and private banking — and everyone is collaborating together for your business growth.

“When your banking services are provided locally, it saves time, reduces hassle, and allows you to use your money more efficiently,” Steve notes.

Stronger risk management 

Integrated systems allow for tighter controls, better monitoring, and fraud protection, as well as quicker response to potential issues.

More strategic partnership & flexibility

A deeper relationship allows us to be more flexible and proactive across the board, not just on one product.

INB can make faster and more consistent loan decisions when we have long-term knowledge of our clients’ situations and potentially offer better financing terms.

“Because we see the full picture, we can proactively advise our clients, whether it’s timing a capital investment, managing seasonality or navigating uncertainty,” Cami says.

Turn Capital Into Business Growth

Whether it’s for operations or growth, capital is only effective for your business when you have the best strategy in place.

As we see at INB, businesses that combine the right type of funding with strong cash flow management, clear visibility, and an integrated banking relationship can thrive and expand.

“At the end of the day, centralizing lending and treasury turns INB from a vendor into a true financial partner. We want to help our clients run smarter, not just borrow capital,” Cami says.

Ready to make your capital work for you? Connect with the INB Treasury team today!