Top-rated loans for cash flow

All businesses require sufficient cash to fund regular day-to-day outgoings. This could be paying employees, rent for a retail space or office, or purchasing essential stock. Sometimes, a delay in money coming in can jeopardise meeting these costs and put your business in trouble. Managing cash flow is the way to avoid these issues, including exploring borrowing options. In this article, you can find our top-rated loans for cash flow and all the key information you need to know about business loans.

How does a cash flow business loan work?

A business loan for cash flow works in the same way as any other business loan and in a similar way to a personal loan. Your business would apply to borrow a specific amount of money from a lender and agree to repay it over a set period of time. The lender then decides whether to approve the application, reject the application or offer to lend a different amount. At this stage, the lender will also decide what interest rate to offer your business. The interest on the business loan is essentially how much the applicant will need to pay in addition to repaying the borrowed money.

Exactly how much you business is able to borrow will depend on a whole range of factors, the most important being financial history, credit history and the value of any assets put up as collateral to guarantee the loan. The application will involve a credit check, potentially on both the business and an individual. You can read our article ‘What is a business credit score?’ to learn more about how a business's credit history can affect an application.

Compare top-rated loans for cash flow - December 2024

This table shows how much you can borrow and for how long through various lenders. The rate of interest you pay will depend on whether you borrow more or less over a shorter or longer period. Also, keep in mind that the loan amount your business eventually receives and the rate of interest you pay will be based on your credit history and financial circumstances, so it may differ from the representative APR you may see online.

Loan provider	Available loan term	Available loan amount
Tide	1 - 72 months	£1,000 - £20,000,000
Funding Xchange	1 - 120 months	£1,000 - £500,000
Love Finance	3 - 60 months	£5,000 - £500,000
iwoca	1 - 24 months	£1,000 - £1,000,000
Rise Funding	1 - 72 months	£10,000 - £5,000,000
Nest	1 - 120 months	£10,000 - £5,000,000
Barclays	12 - 240 months	£1,000 - £100,000
Nationwide Finance	12 - 72 months	£6,000 - £10,000,000

The key figures in a cash flow loan comparison

Key figure	What it means
Loan amount	The amount you are borrowing from the lender. This could be anything from £1,000 to over £1,000,000, depending on the size of your business and how much you need.
Loan term	The length of time over which you will pay the money back. Some businesses will have the choice between repaying a loan over many years or a few months, while others may have to accept a specific term that makes each monthly payment affordable.
APR (annual percentage rate)	This is the annual rate of interest that shows you the cost of the debt. It takes into account the interest you are being charged as well as any other fees that are applicable.
Representative APR	This is the APR that a lender expects at least 51% of successful applicants to be offered. Your business may be charged more or less than this figure, but it is a good way to compare providers.
Loan fees	The extra money you are charged on top of repaying what you borrow. Fees will vary from lender to lender and can sometimes be added to the loan amount.
Early repayment charge	This is a percentage figure that some lenders will charge your business if you choose to clear your debt before the end of the loan term.
Credit score	Your business credit score is an assessment of how trustworthy a borrower your company is. A low credit score may mean your loan application will be rejected, while a high score suggests you could be offered the best rates. In some cases, individual credit scores will be checked too.

What are the different types of business cash flow loan and how do they work?

A business has many different options when it comes to borrowing money. The best fit for your company could be the most flexible option, the one with the lowest interest or the deal with the longest repayment period. The best way to pick the right path is to learn how each works. Below we provide some information on how the main types of business loan work:

• Bank loans - You can apply for a business loan with most local high-street banks, but the interest rate you are charged may not be the cheapest available. However, there can be other benefits to borrowing from a bank, especially if your business also holds a current account with the lender. We cover the advantages and disadvantages in our article 'Pros and cons of a business bank loan'.
• Unsecured business loans - Business loans are either secured or unsecured. The terms of an unsecured loan will be based on the company’s financial circumstances and credit history, rather than the value of any specific asset. These can include the amount you can borrow, how much interest you are charged, the length of the loan term and whether your business is accepted at all.
• Secured business loans - The key details of a secured loan are based on the value of the asset you secure the loan against. The asset can be sold to cover the debt if the loan is not repaid.
• Lines of credit - Like with a credit card, this is a form of revolving borrowing. A business can borrow up to a certain limit and only repays the amount borrowed, plus interest.
• Working capital loan - A short-term loan that can work well for short-term cash flow issues and cover any day-to-day running costs. It is not usually used as a long-term solution to any financial troubles.
• Invoice financing - A business can essentially sell a debt that it is owed, to a lender. The lender pays the company for a percentage of an unpaid invoice and when the invoice is paid, the money goes to the lender instead of the business.
• Merchant cash advances - This is a cash advance based on expected future revenue. Repayments are made through deductions from the company’s earnings once the revenue arrives.
• Asset financing - This is a way to spread the cost of business equipment or machinery. The purchases are paid for in regular instalments over an agreed period of time instead of upfront.
• Government Start-Up loan - Backed by the UK government, these loans are exclusively for businesses that have been trading for 36 months or less and can be used to support growth and tackle any early cash flow hurdles. There is more information on the Start Up Loans website. We also cover other types of startup loans in our article 'What are business startup loans?'

How business cash flow loans work: Advantages and disadvantages

A business loan will not be the right solution for every company. Here are the key advantages and disadvantages to weigh up.

Advantages of a loan for cash flow	Disadvantages of a loan for cash flow
Access money more quickly when compared to saving up excess revenue	The business will need to repay the debt with interest
You can use the money to cover most business expenses, not just short-term cash flow problems	The borrowing costs and the terms of the loan will depend on the business’s credit score (in some cases individual credit scores will be checked too)
Spread the cost of your business spending	Missing repayments will likely trigger hefty fees, additional interest and make accessing credit more difficult in the future
Grow at speed without the need to wait for revenue to increase	A secured business loan will mean a valuable asset will be at risk
Get the money your business needs without having to sell shares and potentially give up control	Some providers will demand a personal guarantee from a company director who will then be liable for the debt should the business be unable to repay
Repay in regular instalments over a set period of time, allowing you to plan for the future knowing what the monthly costs will be

Applying for a business cash flow loan

Applying for a cash flow loan should be a simple and straightforward process. Once you have found the right product and chosen a lender, you can usually choose to apply online, over the phone or in a branch. At this point the lender will require more information about your business and – in some cases – personal information about yourself or other individuals involved in the company.

You may need to provide information on revenue and costs through bank statements or company accounts. You may even need to supply a business plan showing how you expect company finances to evolve in the future. This is all to get across to the lender that your business can be trusted to repay the debt and make enough money to afford the repayments.

With a secured business loan, the lender will need details on the asset being provided as collateral, such as a property valuation or proof of purchase for expensive equipment.

All the information you provide will be assessed and the lender will decide whether your business's application will be accepted for the loan. Part of this assessment will be a credit check to test the creditworthiness of the business. It can be a good idea to check your credit score before you apply for a cash flow loan to correct any issues or make any quick fixes. We explain more about business loan eligibility in our article 'Who can get a business loan?'.

How does a company credit rating work?

A business will have a credit file that is checked by a lender during the application process and this will assess the company’s credit history and financial circumstances. This is to decide whether or not it can both afford the repayments and be relied upon to clear the debt, rather than spend the money on something else. You can read our article ‘What is a business credit score?’ to learn more.

Like individuals, businesses do not have one universal credit score but instead have multiple scores that are calculated by different credit reference agencies. A business credit file will include information held by the Registry Trust – such as details on any CCJs (County Court Judgements) – and Companies House, among other sources. This means you can make sure your company's credit score is in the best possible shape by avoiding any CCJs and filing full accounts on time with Companies House.

A poor credit score will limit your business’s borrowing options, but it will not necessarily close off borrowing entirely. There are steps you can take to improve your business credit score, or you can look into loans aimed at companies with a varied credit history. We have more information in our article ‘How to get a business loan with bad credit’.

Who can apply for a cash flow loan?

The person applying for the loan will need to be a registered company director in most instances. Check with the lender first if you are unsure whether you are eligible to apply for a cash flow loan on behalf of your company.

Established businesses will likely find it easier to get a business loan, but there are lenders that specialise in loans for small businesses. You can learn more by reading our article 'How do small business loans work?'.

We explain how the application process works in our article 'How to get a business loan'.