Rates and limits shown are indicative. Your facility letter states the limit, the rate, the security and every fee before you draw anything.
Matching the facility to the problem
Most working capital problems are a timing gap, not a shortage. The right facility is the one shaped like your gap.
| Your problem | The facility that fits |
|---|---|
| Customers pay in 60 days, suppliers want 30 | Invoice finance, or a revolving facility sized to the gap. |
| You need stock before a peak season | Stock and trade finance, repaid as the season sells through. |
| Payroll lands before a large contract payment | Revolving credit facility, drawn and repaid within the month. |
| A one-off, dated cost with a clear repayment source | Short-term business loan on a fixed schedule. |
| An acquisition or major capex | Not working capital. See growth facilities. |
Do not fund long-term needs with short-term money
Using a revolving facility to buy an asset you will hold for five years means refinancing under pressure later. Match the term of the money to the life of what it buys.
Revolving credit facility
An agreed limit you draw from and repay as often as you like. You pay interest only on what is drawn, plus a small fee on the limit itself.
| Feature | Typical position |
|---|---|
| Limit | Sized to your monthly working capital cycle. |
| Rate | From 0.8% per month on the drawn balance. |
| Commitment fee | A small percentage of the undrawn limit. |
| Term | 12 months, renewable on review. |
| Repayment | Flexible. No early repayment charge. |
| Security | Usually a general charge, sometimes with a capped personal guarantee. |
Cheapest when it is empty
A revolving facility left mostly undrawn costs very little and is there the day you need it. That is the point of it.
Invoice finance
Advance against invoices you have raised but not been paid for. The receivable is the security, so the facility grows as you sell.
- Advance rate
- Typically up to 85% of the invoice value on approved debtors, with the balance released on payment less fees.
- Confidential or disclosed
- Confidential means your customers are unaware of the arrangement. Disclosed is usually cheaper.
- Whole book or selective
- Fund every invoice, or only the ones you choose. Selective is more flexible and costs more per invoice.
- Recourse
- If your customer never pays, the debt normally returns to you. Non-recourse is available on some debtors at a higher fee.
- Concentration limits
- A cap on how much of the facility a single debtor can represent, because that is where the risk concentrates.
Stock and trade finance
- Funds the purchase of goods you intend to resell, repaid as the stock sells through.
- Suits seasonal peaks, container purchases and long supplier lead times.
- Typically requires a charge over the stock and sight of the purchase and sales contracts.
- Priced per drawdown against the shipment or order rather than as a rolling balance.
Stock that does not sell is still a debt
Trade finance assumes the goods convert to cash on schedule. Be conservative about sell-through — an over-ordered season is a common way a healthy business gets into difficulty.
Short-term business loan
| Feature | Typical position |
|---|---|
| Amount | Up to 5M, subject to assessment. |
| Term | 3 to 24 months. |
| Rate | Fixed for the term, quoted in your offer. |
| Repayment | Equal monthly instalments. No early exit fee. |
| Decision | Typically within 48 hours of a complete application. |
| Best for | A specific, dated cost with an identified repayment source. |
Choosing and applying
- 1Work out whether your gap is timing, seasonality or a one-off cost. That answers which facility.
- 2Check the eligibility criteria and gather the documents before applying.
- 3Connect your accounting feed if you can. It usually improves the limit and shortens the decision.
- 4Apply with a specific use of funds and a stated repayment source.
Documents you may also need
Working Capital Eligibility
What we look for before approving a facility: trading history, turnover, cash flow quality and the security position — published so you can check before you apply.
Growth FacilitiesGrowth Facility Types
Acquisition finance, expansion capital, capex funding and structured facilities — what each is for, how it is secured and how it is repaid.
Business CheckingGrowth Scale
For companies where money now moves through a process: user permissions, approval chains, bulk payables and API access to your own data.
This document was last updated on 1 August 2026. We publish the current version here at all times; superseded versions are available on request.
If anything on this page is unclear, write to us and we will explain it.