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Working capital - solar EPC (negative cycle)
What it is
Structuring contracts so customer advances and milestone payments arrive before suppliers must be paid, leaving the business funded by its counterparties rather than by debt or equity
It is achievable in solar EPC because build cycles are short and developers pay against milestones
Impact on industries
- Growth funds itself - a business with negative working capital generates cash as it expands, which is the opposite of most construction
- Removes the balance-sheet constraint that caps growth for conventional contractors, so scaling depends on order intake rather than funding
- Depends entirely on bargaining power, which weakens when order books thin or competition intensifies
- It is a liability structure as much as an asset one - advances must be discharged through delivery, so a slowdown converts the advantage into an obligation