While startups promise moonshots and Fortune 500 companies garner headlines, companies generating between $10 million and $1 billion in revenue, also known as middle market growth companies (MMGCs), drive an outsized portion of worldwide economic growth.¹ MMGCs play a pivotal role in global and national economies, and are a substantial portion of GDP and employment, especially in the United States. They’re also highly reliant on leveraging working capital to fund strategic initiatives, streamline operations, optimize cash flow — and even thrive in uncertain environments.
Visa's 2024-2025 Middle Market MMGCs Working Capital Index surveyed nearly 1,300 CFOs and treasurers across five global regions and eight industry sectors to examine how MMGCs succeed. The report reveals that 81 percent of MMGCs used at least one working capital solution in 2024 — a 13 percent increase from the previous year. Read on for seven key insights from this year’s report — and how working capital can be the catalyst for MMGC growth.
1. Adopting digital solutions to enhance working capital efficiency
MMGCs are increasingly turning to digital-first tools like virtual cards as well as real-time payment systems to improve working capital efficiency and cash flow management. This shift is particularly notable in the healthcare industry in Europe and Asia-Pacific with 16 percent gains, and retail in Central Europe, Middle East and Africa (CEMEA), with a dramatic 26 percent gain, according to the report.
“We're working to empower our banks and their clients with the tools we already have to provide working capital benefits,” said Lauren Hewings, head of Working Capital Solutioning, Visa Commercial Solutions. “We have 38 different solutions with partners around the world that address working capital needs, including digital payment acceptance and buyer-led interchange, a model where the MMGC has more control over the terms and conditions of the interchange fees, which can improve cash flow management.”
By adopting real-time payment systems and other digital solutions, MMGCs can streamline operations, gain better visibility into cash flow and make faster, more informed decisions — which are critical for staying competitive in a dynamic and interconnected economy.
2. Utilizing corporate and virtual cards for strategic growth
Top-performing MMGCs are nearly three times more likely to use corporate or virtual cards, a digital payment method issued by a financial institution through a website or app, compared to their lower-performing peers, according to this year's report. More than 4 in 10 users surveyed deployed these tools in 2024 for strategic growth initiatives, like entering new markets and upgrading systems. Virtual cards alone saw a 32 percent increase by surveyed MMGCs. And while 80 percent of top-performing companies view virtual cards as solutions that can be used for both payables and financing, only 20 percent of lower-performing companies see them that way. Meanwhile, more than 40 percent of MMGCs in manufacturing, construction, fleet and mobility, and professional services primarily view virtual cards as a payables tool, rather than a financing solution.
Along with streamlining supplier payments, corporate and virtual cards offer greater flexibility than traditional payment methods, which allows businesses to access capital as needed without lengthy approval processes. That, according to Hewings, reiterates the importance of flexible timelines and their implicit benefits.
“Virtual cards provide access as needed to pay suppliers early, which is often associated with more favorable pricing,” she said, and as such, are a major reason for their increased adoption.
3. Enabling on-demand access to working capital
Favorable rates aren't the biggest hurdle in working capital — access is. According to the Working Capital Index, only 3 percent of MMGCs reported smooth access to working capital, underscoring a significant gap in the market. Solutions like virtual cards are helping to bridge this gap by allowing businesses to tap into funds as needed.
“In supply chain finance, you have a big company buying from a smaller company,” Hewings said. “That smaller company has a credit grade, which is less than a big company. The big company goes to the smaller company and says, ‘Look, I’m working with my bank and you’re going to be able to borrow at my working capital rates.’ But for everyone else in the world, like the MMGCs, those options are not available for various reasons,” which include their size, credit rating and the banking relationships to enable those deals. And that results in higher borrowing costs and fewer options for working capital.
Just-in-time financing, for one, enables CFOs to respond swiftly to operational needs, seize growth opportunities and improve cash flow management — especially in industries facing volatility. As an example, the fleet and mobility sector, where unplanned cash flow gaps are more frequent, saw a 45 percent reduction in profit margins, longer cash conversion cycles and a decrease in cash flow predictability due to the shift to electric vehicles, supply chain challenges and higher fuel prices. That’s led to a shift in the use of working capital solutions, with a 24 percent year-over-year decline in strategic usage, as companies increasingly rely on them for tactical and emergency purposes to address unplanned cash flow gaps.
4. Using working capital strategically for growth initiatives
For MMGCs, working capital is no longer just a tool for managing day-to-day operations — it's a strategic growth driver. According to the Working Capital Index, approximately 8 in 10 surveyed CFOs and treasurers say they're likely to use external working capital in the next year, and more than 7 in 10 expect to use those funds to support strategic initiatives, such as expansion, technology upgrades or entering new markets. That’s in line with recent trends that show businesses focusing on optimizing cash flow to drive growth and innovation, especially in uncertain economic environments.²
“Visa wants to enable our financial institutions to avail themselves of solutions that provide better financial impact to them and to their customers,” Hewings said.
For example, the healthcare sector saw a 51 percent increase in overall reliance on external financing, which allowed firms to boost their liquidity to support growth initiatives. In agriculture, the strategic use of capital resulted in 38 percent more MMGCs using working capital for expansion, along with supplier payment integration increasing by 21 percent. This proactive approach is essential as companies navigate uncertainties, from economic fluctuations to potential supply chain disruptions.
5. Personalizing solutions for tailored working capital management
There’s no silver bullet for every industry sector or every region, and as MMGCs seek to optimize finances, demand has increased for personalized working capital solutions that cater to them. According to the 2024-2025 Working Capital Index, nearly a third of CFOs cited a misalignment between standard working capital solutions and their needs. That's particularly true in regions like CEMEA, where more than 40 percent of MMGCs in the retail sector reported this as their biggest pain point.
“We often look at working capital as an umbrella. We have digital partnerships teams all over the world looking at fintechs that are out there partnering with financial institutions and corporates to deliver value,” Hewings said. “Sometimes it’s a monoline solution to fix something, such as extending payables or curbing receivables. Everyone wants to pay later. Everyone wants to get paid earlier.”
Tailored working capital solutions can help enhance liquidity and streamline cash flow management, enabling businesses to better meet financial obligations. This can help lead to improved relationships with suppliers and creditors, as companies can negotiate more favorable terms and pay invoices earlier, strengthening trust and reliability across the supply chain.
6. Enhancing cash flow visibility and predictability
Improved cash flow visibility is one of the most impactful ways top performers are optimizing their working capital. In 2024, 84 percent of MMGCs experienced cash flow gaps, but the ones that implemented working capital solutions saw a 7 percent year-over-year improvement in the Global Working Capital Index. In addition, 48 percent of companies that used these solutions reported better working capital ratios, while 25 percent saw improvements in their cash conversion cycles. Hewings said that L'Oreal is a great example of a large company that’s a model of stability thanks to how it manages working capital.
“L’Oreal is the gold standard,” she said. “It cares more about its physical supply chain because the company can't operate without it. It pays all its bills within 30 days. You could imagine shareholders or analysts saying, ‘Hey, you’re a big company. You could pay as late as you want and make more profit.’ But L’Oreal's response to that is, ‘No. I’m profitable because my partners are important.”
7. Building stronger buyer-supplier ecosystems
One frequently overlooked benefit of strategic working capital management is its ability to bolster relationships within the supply chain. When MMGCs use working capital solutions to pay suppliers early, it not only improves their cash flow, but trickles down the entire supply chain. Top-performing MMGCs paid 47 percent of their supplier invoices ahead of time, which can help result in stronger buyer-supplier relationships and a more robust overall supply chain ecosystem.
These improvements can lead to more stable supply chains and reduced risk of disruption, particularly in industries that rely on tight supplier networks.
“Think of it like a credit card with an interest-free period,” Hewings said. “Once you pay your bill, you're off to that next cycle, making payments and purchases. You’re not paying interest on the new charges. Essentially, you get free loans every month.” It’s the same with large companies, she added.
“A working capital strategy brings buyers and suppliers together in a meaningful way, helping manage acceptance on the merchant side, streamline payables and reinforce the benefits of improved Days Payable Outstanding (DPO), provided it’s used correctly.”
By using working capital efficiently, MMGCs can create a more resilient and collaborative supply chain that supports long-term growth — not just for themselves, but for their partners, too.
- Visa. Middle market businesses.
- McKinsey & Co. (2023). Innovation: Your Solution for Weathering Uncertainty.