Driving Growth at a Softline Products Manufacturing Company in the UAE 

Background 

Project Atlas is an anonymized case involving a UAE-based factory that manufactures custom uniforms for government and corporate clients. The company produces items like school uniforms, taxi driver attire, and graduation garments, often in large project batches worth AED 4–6 million each. It has built a reputation for quality, but its growth was constrained by the lengthy payment cycles of its clients, which are typically 90–120 days. 

Challenges 

The extended payment terms meant that cash flow was routinely locked up for three to four months per project. This created a working capital crunch: even as purchase orders streamed in, the factory’s money was tied up in accounts receivable. 

The business struggled to fulfill multiple contracts in parallel because ongoing projects absorbed most of its liquidity. Each new large order brought significant upfront costs (materials, labor) long before customer payment arrived, leading to cash flow gaps. The situation limited the company’s ability to take on new clients or larger contracts despite strong demand. Traditional lenders offered limited relief – their financing processes were slow and collateral-heavy, not matching the urgency or scale of the factory’s needs. The company needed a way to unlock cash from its invoices faster in order to grow. 

Zelo’s Solution 

Zelo stepped in with an invoice financing facility that immediately addressed the factory’s working capital gap. Initially, Zelo provided a AED 2 million facility secured against the factory’s receivables (outstanding customer invoices). This meant that as soon as the factory issued invoice to a client was approved by the client, Zelo would advance a significant portion of that invoice amount without waiting 90–120 days for the client to pay. Effectively, the factory was converting its unpaid invoices into immediate cash, using receivables as collateral for short-term funding. 

Over time, as the factory successfully delivered on projects and demonstrated strong client payment behavior, Zelo increased the facility to AED 5 million to support larger volumes. The financing process was fast and flexible – far quicker than a traditional bank loan. Zelo’s model relied more on the creditworthiness of the factory’s clients and confirmed purchase orders than on heavy fixed collateral, which made approval and scaling of the facility much easier. With funds flowing within days of invoicing, the factory suddenly had ready capital to pay for raw materials, labor, and other expenses for multiple projects concurrently. 

Results and Impact 

Cash flow unlocked: By financing invoices through Zelo, Project Atlas immediately freed up cash that had been locked in the 90+ day payment cycle. This unlocked working capital allowed the factory to run several contracts in parallel and even start new ones back-to-back. In fact,

within a short period, the company confidently took on 3 new clients that it previously had to put on hold. The immediate liquidity ensured smooth operations – the business no longer had to slow down or pause production while waiting for payments. As one industry resource notes, having immediate cash from receivables ensures “smooth operations and the ability to take on new clients and projects”, which is exactly what happened. 

Cost Savings and Margin Improvement: With cash on hand, the factory could negotiate better terms with its suppliers. It began paying suppliers earlier or in bulk, leveraging the fact that many suppliers offer discounts for upfront or timely payments. This negotiation, made possible by improved cash flow, reduced the cost of goods sold by around 5% – a significant savings on large orders. Lower raw material costs directly improved the factory’s gross margins. In an industry where margins are often tight, a 5% reduction in COGS boosted profitability per project. Over time, these savings compounded, strengthening the company’s financial position. 

Operational Growth: The infusion of working capital meant the company could invest in scaling its operations. It increased its inventory of raw materials (avoiding delays in procurement), hired additional tailors and quality control staff to handle the higher workload, and even upgraded some machinery to improve efficiency. All of this was done without waiting for client payments. The company’s agility in fulfilling orders improved, further enhancing its reputation and enabling it to win more contracts. Essentially, Zelo’s financing became the catalyst for a cycle of growth – more cash led to more contracts, which led to higher revenues and profits that could be re-invested. 

Key Takeaways: 

- Unlocking Receivables for Growth: Invoice financing transformed idle receivables into usable cash. This freed the company from the 90-120 day payment trap and provided immediate working capital to fund new projects. The ability to convert invoices to cash within days gave the factory a continuous cash flow engine driving its growth. 

- Parallel Contract Fulfillment: With improved liquidity, the company could run multiple large projects at once and onboard new clients without cash flow worries. Zelo’s support meant growth was no longer limited by the timing of client payments. 

- Margin Expansion via Supplier Negotiation: Ready cash enabled early supplier payments, which most suppliers reward with discounts. This flexibility reduced unit costs and immediately improved profit margins, demonstrating that better cash flow doesn’t just support growth – it also drives efficiency and profitability. 

- Flexible Alternative to Traditional Lenders: Unlike a traditional bank that might have required onerous collateral or long approval times, Zelo offered a nimble solution tailored to the business’s invoices. The relationship grew from AED 2M to AED 5M quickly as needs increased, showing Zelo’s flexibility in scaling support as the client’s business expanded.