Understand the gap before choosing the product
A profitable business can still face a cash flow gap when it pays suppliers or staff before receiving customer payments. Seasonal stock purchases or a new contract can also put pressure on available cash.
Map the expected size and duration of the gap. A temporary timing problem is different from recurring losses; borrowing alone may not resolve an underlying shortfall.
Different ways to fund the cycle
| Structure | How it is generally used | Key consideration |
|---|---|---|
| Term loan | A defined funding requirement | Repayments start on the agreed schedule |
| Line of credit | Drawing and repaying within a limit | Facility reviews, access rules and fees |
| Invoice finance | Funding eligible receivables | Invoice and customer suitability |
Swipe or scroll the table sideways to see every column.
Stress-test the repayment plan
Start with the business cash flow forecast, including existing loans and tax commitments. Then model a delay in customer receipts or a slower trading month. This helps you understand the room available for additional repayments.
Avoid treating an approved limit as a target to use in full. Consider the amount needed and the cost of keeping finance available.
What to prepare
- A cash flow forecast by week or month
- Seasonal trading patterns
- Supplier terms and customer payment timing
- Current finance facilities and limits
Common questions
Are cash flow loans and working capital loans the same thing?
These terms often overlap in marketing. Focus on the facility’s structure, costs and conditions rather than the label.
Can invoice finance also support working capital?
It can release money against eligible receivables. It depends on the invoices, customers and lender requirements.
General information only. Product terms and availability vary. Check the actual proposal and obtain advice appropriate to your circumstances.