What is Cash Flow Finance And How to Apply

According to the Bank of England, in 2022 Q1, there has been a strong demand for working capital finance as companies cope with unstable market conditions and the rise in material and labour costs.

Revenue growth is good news for any business, but to improve efficiency you need to make investment and that requires cash flow.

Revenue, for many businesses has been impacted by the COVID-19 pandemic. However, there are other factors that have influenced revenue, such as seasonal trading or lower demand for products and services.

With small firms are taking even longer to free up cash from things such as unpaid invoices and stock, many companies are experiencing lower working capital reserves.

Cash flow finance can be a good short-term solution for shortages of money within your business or a way to make up for cash tied up in other places.

Cash flow loans are not a long term solution for improving the financial health of your business, if your lending needs are over longer periods of times, there are a number of other finance solutions available to you.

How much can you borrow with cash flow loans?

While there is no limit on how much you can borrow, the amount you are eligible for is determined by your company financial health and credit status.

If your business has been trading for under 12 months, the amount you can borrow will be lower than companies that have been trading for longer.

You need to have realistic expectations of the amount you are eligible for based on your financial status and trading time.

Are you eligible for cash flow finance?

Finance is available for sole traders, limited companies, PLCs and LLPs trading within the UK.

The main factors lenders consider are;

  • Company accounts
  • Management accounts
  • Bank statements
  • Existing finance agreements
  • Company financial health
  • Trading time (with many favouring a minimum of 12 months)
  • What the funds are being used for - for example if your company has won a new contract and funds are needed to support the contact

Company size does not have a direct impact on eligibility but can have an impact on how much you can borrow.

There are many lenders who offer cash flow loans for small businesses and SMEs as well as large corporations.

Small business owners seeking cash flow loans are just as likely to be approved if they have a good credit score and company financial health, being a large company does not automatically mean you will be approved.

If your business is not showing the required level of profit, trading time or the desired loan amount is over affordability thresholds then it is unlikely that you will be able to access the required finance.

How can you apply for a cash flow loan?

Step 1: Gather all the required documents

  • Passport(s) for proof of identity
  • Company Accountants
    • Current financial assets
    • Revenue
    • Liabilities
  • 3 months company bank statements

Step 2: Contact us to discuss your borrowing needs

  • Loan terms - 3 months to 5 years terms are available depending on credit status and other variables.

Step 3: We will match you to the most suitable lender based on your company status and borrowing needs

  • We source finance from over 250 lenders including traditional high street banks and bespoke independent finance Each lender has their own criteria and we match your circumstances and requirements to the most suitable provider.

Step 4: Keep on top of communications

  • You will need to send documents when requested, sign privacy statements as well as consent forms and answer any questions in relation to your application
  • Delays in replying when asked for documents required to process your cash flow loan will increase the time it takes for your loan to be approved

The best loan terms for your company depends on how much you want to borrow and how much the repayments are.

Some businesses choose to pay off their loans quickly, which increases monthly payments, while others spread the cost over longer terms to keep the monthly repayments lower.

Applying for an unsecured loan?

The first step is to determine how much you need and what the funds are for. It's important to be realistic about your needs, so don't try and estimate incorrectly.

To be approved for a loan, you may have to provide information related to your work history, profit and income and other business financial documents.

For new starts or businesses that have been trading for less than 12 months, unsecured lending can be more difficult to get.

For businesses that have been established for longer, finance can be easier to get as lenders can gauge your business and borrowing behaviour more easily.

Once you have determined how much you need to borrow, you can start applying for loans online, through a bank or using a finance broker.

Whichever route you take you will need to answer questions about your credit score, income, revenue, and other criteria that will determine whether you will qualify for the loan.


How long do cash flow loans take to process?

Cash flow loans can be quick to organise. Once you have made your application you can expect a decision in 24 hours in most cases.

When your application has been approved funds are usefully released within 24 hours of signing the relevant documentation.

What loan terms are available?

Cash flow loans are available from 3 months to 5 years depending on credit status and other variables. Subject to full underwriting and acceptance.

How quickly can I get the funds?

Funds are usually available within 24 hours of an approval, providing the necessary documentation is signed and returned along with satisfying any conditions that may have been imposed.

Updated: August 12, 2022