Business & property finance

Business loans and working-capital funding

For owners who can explain what the money will pay for and how the business will repay it. Start with the cash gap and the repayment source, then compare funding structures.

Compare two business loan repayment scenarios →

Published by The Finance Place · Updated · General information

Choose the route around the need

An £80,000 vehicle purchase, a two-month payroll gap and an acquisition of another company are not interchangeable requests. A term loan can spread a defined cost; a revolving facility may better match a repeating timing gap. Borrowing is a poor substitute for addressing persistent losses.

  • Vans, machinery and equipment: compare a business loan with asset finance.
  • Eligible unpaid B2B invoices: investigate invoice finance and its ongoing costs.
  • Buying premises: separate the commercial mortgage and completion cash from day-to-day working capital.
  • Stock or seasonal orders: test the full buying-to-cash cycle, including the quiet season.

Compare cost on the same basis

Compare net cash received, total repayments, every fee, term, payment frequency and early settlement terms. An annual reducing-balance rate is different from a flat rate or factor rate. A factor of 1.2 on £50,000 means £60,000 repayable before other costs; it does not by itself mean a 20% annual rate. Daily and weekly collections can create a different cash strain from monthly payments.

Model reducing-balance monthly repayments →

Fund a timing gap, then test the repayment source

Build a cash-flow forecast using expected collection dates rather than invoice dates. Include VAT, tax, payroll, supplier bills, existing finance and owner drawings. A business with healthy annual profit can still run out of cash in a quiet month. Test a slower sales month and a customer paying 30 days late, and keep a buffer for a forecast that proves wrong.

See how slower customer payment affects invoice finance →

Trading for 18 months is relevant, not an automatic verdict

A shorter history gives lenders less evidence. Filed accounts may cover only part of the current business, so organise up-to-date management accounts, bank statements, contracts, owner experience and a clear repayment forecast. Available routes and pricing differ; a deposit or guarantee does not assure acceptance.

Prepare a case with limited trading history →

Buying another business

The purchase price is only one part of the funding need. Include due diligence, transaction costs, stock, working capital after completion and any debt assumed. Separate recurring trading cash from optimistic synergies. Asset-backed lending, term debt, buyer equity and deferred seller payments can interact; lenders and legal advisers must agree security, ranking and restrictions. Test the combined debt against a weaker post-acquisition outcome.

Unsecured does not necessarily mean no personal exposure

A loan described as unsecured may still require a director's personal guarantee. Understand its amount, continuing obligations and any separate security before signing. Regulation and consumer protections depend on borrower and agreement type. Do not use a company label as proof that a borrowing route is unregulated, safe or suitable.

Useful next steps

Business funding workspace →Asset finance comparison →Personal mortgage with self-employed income →

Use the calculator and organise your evidence before choosing a lender. TFP’s contact and introduction service is currently closed. Ask an appropriately qualified or authorised professional for case-specific advice.

Sources and limitations

These sources explain product structures and risks. Lender pages describe their own offering, not universal eligibility rules or a recommendation from TFP. No independent professional review is claimed.

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