Cashflow Funding
Cashflow funding to keep your business running and growing, even during slow periods.
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What is cashflow funding?
Cashflow is the money moving in and out of your business – often coming in through invoices and out when you need to buy stock, pay rent on your premises or pay employees.
Late payments and the need to buy stock upfront can leave you without the cash you need – cashflow funding can help you fill any gaps. This type of funding is also helpful for seasonal businesses that might have lower revenues at certain times of year, but need to keep up with overheads all year round.
Types of cashflow funding
There are a number of different types of cashflow funding. We can help you find the option that’s right for you – read on to find out how to get cashflow funding.
Unsecured loan
The most common type of loan used to ease cash flow issues is an unsecured business loan.
These can be either short-term loans or longer-term ones with early repayment benefits where you can save on interest if repaid early.
Overdrafts
Historically overdrafts are the most popular way that businesses manage their working capital. They can still be a good option, but these days there are similar alternatives offering more flexibility and higher credit limits.
Revolving credit facilities
Similar to overdrafts, but without the need for a bank account, revolving credit facilities are a pot of funds that you can access as needed. You’re usually charged on the amount you drawdown and in some cases there’s a small fee to use the facility.
Invoice finance
A good option if you offer credit to your customers in the form of invoices with payment terms. You can usually choose to get a percentage of all or a selection of the invoices due to be paid to your business.
Merchant cash advance
Merchant cash advances are an option if you make a good percentage of sales through card machines or online card payments. Repayments are taken as a percentage of card sales, which means the amount you pay flexes in line with how much you sell.
VAT loans
VAT loans can help when it’s time to pay your VAT bill to HMRC. VAT payments are often a significant outlay in one go, so the ability to spread the cost over a longer period can help ease the pressure on your cashflow.
Cashflow funding FAQs
The most frequently asked questions about cashflow funding.
Cashflow funding is a type of unsecured lending, and can be helpful for businesses without the assets to secure a standard business loan. Your eligibility will be based on your anticipated incoming cash flows, implying that you are essentially borrowing against future revenues.
Since this is an unsecured loan, the interest rate for cash flow funding tends to be higher than for a standard business loan. You’ll also be offered a loan for a shorter period of time, usually for one to 12 months.
However, your interest rate will depend on many factors such as the age of the business, industry, credit profile, turnover, affordability in banks, number of customers/transactions, and region.
Getting a quote from us won’t impact your credit score. You’ll only need a full credit report once you proceed with a lender’s full application. We’ll reduce the number of credit searches you need by carefully determining your eligibility for each loan option.
Most lenders we work with only do soft credit searches, and although a small number may apply hard credit searches, we will help you navigate through this.
Our initial application process takes just two minutes, and we’ll provide you with a range of options from different lenders. Lenders can give us an answer within 24 hours and sometimes can come back to us in two.
Then, depending on how quickly you can provide the required documentation and sign agreements, you could be able to access funds in a couple of days.