I need cash for running costs, or to get through a quiet season
Ways to smooth out cash for wages, stock and bills, or a seasonal dip, cheapest first, without selling shares.
Many businesses are profitable over a year but short of cash in some months: before a busy season, while stock sits on the shelves, or when a big bill lands in a quiet month.
The cheapest help often comes from people you already deal with: customers who pay upfront, suppliers who give you longer to pay, and HMRC if a tax bill is the problem. An overdraft or a revolving facility suits a gap that comes and goes. Fast, unsecured options cost much more, so read their downsides first.
20 routes to look at, cheapest first
Compare the first 4 side by side- L0
Free or nearly free
Little or no cash cost, though most take time and admin. Some bring money in, and a few have small fees.- Own cash and no-cost
Customer prepayments, deposits and pre-sales
Ask customers to pay some or all of the price before you deliver. The cash arrives before your costs, so you borrow less, but you owe customers the goods or a refund until you deliver.
Days - Own cash and no-cost
Statutory late-payment interest and compensation
If another business pays you late, the law lets you add interest and a fixed compensation sum to the debt. It costs nothing to claim and can speed up payment.
Days - Own cash and no-cost
Supplier trade credit (negotiated payment terms)
Agree with your suppliers to pay them some time after they deliver. It works like a short, interest-free loan, but suppliers set the limits and may want a track record first.
Weeks
- Own cash and no-cost
- L1
Very cheap or subsidised
Borrowing on better terms than the market, usually because a public body, community lender or large buyer is involved.- Own cash and no-cost
HMRC payment plan (Time to Pay)
If you cannot pay a tax bill on time, HMRC may agree a payment plan so you can pay it off in monthly instalments instead of all at once.
DaysNot a raise - Government-backed and community lending
Community development finance (CDFI) loans
Loans from Community Development Finance Institutions, lenders that exist to support small businesses, start-ups and sole traders that mainstream banks often overlook.
DaysPersonal guarantee likely - Government-backed and community lending
Growth Guarantee Scheme
A British Business Bank scheme that gives accredited lenders a 70% government guarantee, so they can offer loans, overdrafts, asset finance and invoice finance to smaller businesses they might otherwise turn down.
Weeks£1k to £2mPersonal guarantee likely
- Own cash and no-cost
- L2
Mainstream secured debt
Standard borrowing from banks and mainstream lenders, often secured on assets or backed by a personal guarantee.- Bank and mainstream debt
Asset refinance and sale and leaseback
Raise cash against equipment, vehicles or property the business already owns, and keep using them. The lender takes ownership until you have paid it back, and can take the asset if you do not.
Weeks - Bank and mainstream debt
Bank term loan
A fixed amount borrowed from a bank or other mainstream lender and repaid in regular instalments over an agreed term, with interest.
WeeksPersonal guarantee likely - Bank and mainstream debt
Business credit card
A credit card in the business's name, with a spending limit and often a short interest-free period. Handy for everyday costs and small purchases, but expensive if you carry a balance.
DaysPersonal guarantee likely - Bank and mainstream debt
Business overdraft
A borrowing limit on your business bank account. You pay interest only on what you use, but the bank can usually ask for it back at any time.
DaysPersonal guarantee likely - Bank and mainstream debt
Revolving credit facility
A credit limit you can draw on, repay and draw again, paying interest only on what you use. It is quick and flexible for short-term needs, but usually costs more than a term loan.
DaysPersonal guarantee likely
- Bank and mainstream debt
- L3
Specialist secured debt
Borrowing secured on specific assets such as invoices or stock, with more fees and conditions than mainstream debt.- Asset-based and specialist lending
Invoice discounting
Borrow against your unpaid invoices while you keep collecting payments from customers yourself, usually without them knowing you use finance.
WeeksPersonal guarantee likely - Asset-based and specialist lending
Invoice factoring
A finance company pays you most of the value of your unpaid invoices straight away, then collects payment from your customers and pays you the rest, minus its fees.
DaysPersonal guarantee likely - Asset-based and specialist lending
Selective and spot invoice finance
Get paid early on just the invoices or customers you choose, instead of your whole sales ledger. Useful for occasional cash gaps and smaller businesses, but each invoice costs more than a full facility.
Days - Asset-based and specialist lending
Stock and purchase order finance
Finance to pay suppliers for stock, or to fulfil a large customer order, repaid when the goods are sold. It lets you take on bigger orders, but fees are high and the money can only be used for those goods.
Weeks - Alternative and fast debt
Peer-to-peer business lending
Borrow from many individual and institutional investors through an online lending platform regulated by the FCA, instead of from a single bank.
DaysPersonal guarantee likely
- Asset-based and specialist lending
- L4
Expensive or fast
Quick to arrange, often unsecured, and usually the most expensive way to borrow.- Alternative and fast debt
E-commerce and payment platform finance
Online shop and payment platforms offer funding based on your sales through them, repaid automatically as a share of those sales. It is quick and simple to get, but only open to their own sellers and the fixed fee can be costly.
DaysFrom £1k - Alternative and fast debt
Merchant cash advance
A lump sum for businesses that take card payments, repaid automatically as a share of each card sale until the advance and a fixed fee are paid off.
Days - Alternative and fast debt
Revenue-based finance
An advance repaid as a fixed share of your future sales, plus a flat fee agreed up front. Repayments fall when sales are slow, but the fee can make it expensive, especially if you repay quickly.
Days - Alternative and fast debt
Short-term unsecured business loans
Fast loans from online and specialist lenders, repaid over one to 12 months, with no assets needed as security. Quick to arrange, but interest and fees are high and owners usually have to give a personal guarantee.
DaysPersonal guarantee likely
- Alternative and fast debt
Worth knowing
- Write down month by month what comes in and goes out for the next year. Lenders ask for it, and it shows how big the gap really is.
- Ask for an overdraft or facility before the quiet months start. It is harder to arrange once you are short.
- If a tax bill is the problem, contact HMRC before the deadline.