Cashflow Finance
Bridge the gap between paying your outgoings and collecting your income. Cashflow finance keeps your business moving when timing mismatches between supplier payments and customer receipts create pressure on your day-to-day liquidity.
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Step 1 of 3: Security
No upfront fees · Business enquiries only · Min. £25,000
What is Cashflow Finance?
Cashflow finance refers to a range of products designed to address the timing mismatch that affects almost every growing business: money goes out before it comes in. You pay suppliers, staff and overheads now; your customers pay you in 30, 60 or 90 days. That gap is a cashflow gap. Left unaddressed, even a profitable business can fail because of cashflow rather than trading performance. Cashflow finance bridges that gap using the most appropriate product for your business model: invoice finance against your outstanding invoices, a merchant cash advance against your card turnover, a secured business loan against property equity, or a short-term unsecured working capital facility. The right solution depends on whether you have property, whether you have a strong invoice book, and how quickly you need funds.
- Invoice finance: advance against outstanding B2B invoices within 24 hours
- Merchant cash advance: lump sum repaid as a percentage of daily card sales
- Secured working capital: loan against property equity for any cashflow purpose
- Unsecured working capital: assessed on trading performance and bank statements
- Overdraft replacement: revolving facilities that move with your trading cycle
- No single product fits all businesses: we match the solution to the cashflow profile
How Does Cashflow Finance Work?
Identify the cashflow gap
The first step is understanding exactly where the cashflow pressure originates. Is it slow-paying customers creating a debtor book gap? Is it seasonal trading patterns creating predictable troughs? Is it a one-off event such as a large supplier payment, a tax bill or a contract mobilisation cost? The source of the gap determines the most appropriate solution.
Match the solution to the business model
B2B businesses with an invoice book are best served by invoice finance. Retail, hospitality and e-commerce businesses taking card payments suit merchant cash advances. Businesses with property equity can access secured working capital facilities at lower rates. Businesses with strong bank statement history but no property or invoices suit short-term unsecured facilities.
Arrange and draw the facility
Invoice finance and merchant cash advance facilities can be arranged and drawn within 24 to 72 hours. Secured facilities against property typically draw in 2 to 3 weeks. Unsecured working capital loans can draw within 24 to 48 hours for established businesses with clear bank statement evidence.
Repayment aligned to cashflow
The defining feature of cashflow finance is that repayment is structured to fit the business cycle rather than a fixed bank schedule. Invoice finance repays when customers pay. Merchant cash advances repay as a percentage of daily card sales. Secured and unsecured facilities can be structured with monthly payments sized to available cash flow.
Is Cashflow Finance a Good Idea?
Advantages
- Prevents a profitable business from failing due to timing mismatches
- Multiple product options mean there is usually a viable route regardless of circumstances
- Invoice finance and MCA require no property security
- Revolving facilities grow with the business rather than being capped at a fixed amount
- Faster to arrange than any bank facility
- Adverse credit directors considered across most product types
- Addresses the root cause of cashflow pressure rather than just covering the symptoms
Considerations
- Cashflow finance is a cost: the interest or fee must be absorbed into margins
- Addressing the symptom (cashflow gap) is not the same as addressing the cause
- Merchant cash advances carry high effective rates if the facility runs longer than anticipated
- Secured facilities put property at risk if the business does not recover
- Over-reliance on cashflow finance without addressing underlying profitability is unsustainable
How to Secure Cashflow Finance
Map the cashflow profile
Identify the timing, size and regularity of the cashflow gap. Is it predictable and seasonal, or unpredictable and reactive? Has it been caused by a specific event, or is it a structural feature of the business model? This determines which product is most appropriate and how the facility should be structured.
Gather the key evidence
For invoice finance: your aged debtor report and recent invoices. For merchant cash advance: three to six months of card processing statements. For secured facilities: property details and any existing mortgage balance. For unsecured: six to twelve months of business bank statements.
Submit enquiry
Describe the cashflow situation, the amount required, the timeframe and the business model. We identify the most appropriate product or combination of products and return indicative terms typically within 24 hours.
How Much Can I Borrow?
Available amounts vary significantly by product type and business circumstances.
- Invoice finance: up to 90% of eligible invoice book value; scales with turnover
- Merchant cash advance: typically 50 to 150% of average monthly card turnover
- Secured working capital: up to 75% LTV on residential investment property; 65% on commercial
- Unsecured working capital: typically £10,000 to £500,000 based on average monthly revenue
- Minimum facility: £5,000 to £10,000 depending on product
- Combined facilities available where a single product does not meet the full requirement
What Are the Costs?
How Quickly Can I Get a Loan?
The fastest cashflow finance products draw within 24 to 72 hours (merchant cash advance, unsecured working capital). Invoice finance facilities take three to seven working days to set up but then provide same-day advances on each invoice. Secured facilities draw within two to three weeks.
Eligibility Criteria & How to Apply
- UK limited company, LLP, partnership or sole trader
- Invoice finance: B2B customers only; minimum six months trading
- Merchant cash advance: card-taking business only; minimum three months card processing history
- Secured working capital: UK property with available equity; adverse credit accepted
- Unsecured working capital: minimum six to twelve months trading; bank statements demonstrating revenue
- Director adverse credit considered across all product types to varying degrees
- Personal guarantees required for secured and most unsecured facilities
9 Example Uses of Cashflow Finance
Seasonal trading trough
A garden centre generates 70% of its annual revenue between March and September but carries fixed overheads throughout the year. A revolving working capital facility bridges the winter trough, repaid from the spring revenue surge.
60-day customer payment terms
A staffing agency pays its temporary workers weekly but invoices clients on 60-day terms. Invoice finance advances 85% of each invoice on the day it is raised, covering the payroll gap without a property charge.
Large contract mobilisation
A facilities management business wins a £2m annual contract. Mobilisation requires £150,000 of equipment and staff costs before the first invoice is raised. A short-term unsecured facility bridges the mobilisation period.
Retail business with card takings
A retail chain cannot access invoice finance because it sells to consumers. A merchant cash advance of £80,000 is repaid as 15% of daily card sales, with repayment automatically slowing in quieter trading periods.
Late payment from a major customer
A key customer pays 45 days late on a £200,000 invoice, creating an immediate cashflow shortfall. Selective invoice finance against that single invoice provides 85% of the value within 24 hours.
Supplier extended payment demand
A key supplier changes its payment terms from 60 days to 30 days. A revolving secured facility against commercial property smooths the impact while the business renegotiates terms or finds an alternative supplier.
Payroll shortfall
A business faces a payroll date before a large customer payment is received. A merchant cash advance draws in 24 hours and covers the payroll obligation without disrupting staff.
Post-lockdown recovery working capital
A hospitality business reopening after a period of closure needs working capital to restock, rehire and market before revenue returns. A secured facility against an investment property provides the bridge.
Director with adverse credit, profitable business
A profitable manufacturing business has a director with a historical IVA. The business bank statements show consistent revenue. An unsecured working capital facility is approved on the strength of the trading history.
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