I need cash while I wait for customers to pay
Ways to bridge the gap between doing the work and getting paid, cheapest first, without selling shares.
If customers pay on 30, 60 or 90-day terms, you can be profitable on paper and still short of cash. Before borrowing, check what you are already owed: the law lets you charge interest and a fixed compensation sum when another business pays you late.
After that, the cheapest options usually use what you already have, such as your unpaid invoices or your bank account. Faster and unsecured options cost more. Selling shares is rarely the right tool for a short cash gap, so it is left out here.
14 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.
Days - Supplier and buyer-led finance
Supply-chain finance (reverse factoring)
A large customer sets up a scheme so its suppliers can be paid early by a finance company, at a cost based on the customer's credit rating rather than the supplier's.
Weeks
- 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
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
- L4
Expensive or fast
Quick to arrange, often unsecured, and usually the most expensive way to borrow.- 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
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
- Clear payment terms on every invoice make late-payment interest easier to claim.
- If tax is the bill you cannot pay, contact HMRC before the deadline. A payment plan is usually easier to agree early.
- Invoice finance contracts can have minimum terms and exit fees. Read them before you sign.
Sources
- GOV.UK: Late commercial payments: charging interest and debt recovery · checked 7 October 2026
Facts about each route are sourced on its own page.