Let's look into working capital management solutions in a bit more detail.

There are a range of products which corporate banks offer that all have the same aim, and that is to free up cash that would otherwise be tied up in the working capital of a company.

Fundamentally, there are two sides to working capital purchase to pay, which deals with the time from the company, purchasing an item to having to pay for it and order to cash, which looks at the time from a customer placing an order to the cash being received from the customer.

And there are solutions to support both sides on the purchase to pay side.

A corporate bank can offer services such as commodity finance where commodities purchased for input into a company's production process act as collateral for a loan to purchase the commodity in the first place.

Inventory finance, which involves the bank lending money to a corporate client to purchase its required inventory with the inventory itself, potentially acting as collateral or supply chain finance, which is where a bank agrees to settle an invoice for its corporate client with the client repaying the bank later.

This improves the speed of payment to the supplier with the corporate client holding onto its cash for longer.

The aim here is to release cash to a corporate that is otherwise tied up in paying for raw materials to enhance a company's working capital situation while paying a fee to the bank to facilitate this.

In addition for the supplier, the implicit cost of receiving the funds early is based on the client's borrowing cost, which may well be lower than the borrowing cost for the supplier.

If the client is a large corporation with a strong credit position on the other side of a company's balance sheet, the order to cash side, a corporate banker can also offer solutions to help reduce risk from sales receivables. Finance helps the corporate client to improve its cash flow through not having to wait for a customer to pay them.

Once an invoice is issued by the corporate to one of its clients, the corporate may be able to borrow from their bank on the basis of that invoice, so the corporate gets cash now and then uses the funds they get from the invoice when the customer pays to repay the bank.

In future, the bank will charge a fee to their corporate banking client for the service based on the credit risk of the corporate's client who is due to settle the invoice.