UK businesses use a wide range of finance options to manage cash flow, cover upfront costs, invest in equipment, or deal with uneven payment cycles. Some forms of finance are short term and flexible, others are designed for longer-term planning. What suits one business may be unsuitable for another.
This page provides a brief introduction to the most common types of business finance, with links to more detailed guides for each option.
Working capital and cash flow finance
Working capital finance is commonly used to support day-to-day trading. It helps businesses cover gaps between money going out and money coming back in, for example when materials, wages, or subcontractors need paying before invoices are settled.
Read more about working capital finance
Business loans
Business loans are usually taken over a fixed term and repaid in regular instalments. They may be used for a specific purpose, such as supporting growth, smoothing cash flow, or consolidating existing borrowing.
Read more about business loans
Revolving credit and overdraft-style facilities
Revolving credit facilities allow businesses to draw down funds when needed and repay them as cash flow improves. They are often used when work overlaps or income varies from month to month.
Read more about revolving credit facilities
Invoice finance and invoice factoring
Invoice finance is linked to unpaid customer invoices. Funds are released against invoices before customers have paid, helping businesses that operate on longer payment terms. Invoice factoring is one form of this, where a finance provider may also manage credit control.
Read more about invoice finance and factoring
Asset finance
Asset finance is used to spread the cost of equipment such as vehicles, machinery, tools, or plant. Instead of paying upfront, the business makes regular payments while using the asset.
Merchant cash advances
Merchant cash advances are linked to card sales. Repayments are typically taken as a percentage of daily takings, which means they rise and fall with turnover rather than being fixed.
Read more about merchant cash advances
Local grants and regional funding
Some UK businesses may be eligible for local authority grants, regional growth funding, or sector-specific support schemes. Availability varies by location, industry, and business size, and funding is often limited.
Read more about local grants and regional funding
Choosing the right type of finance
The right finance option depends on how a business trades, how predictable its income is, and what the funding is needed for. Understanding the basics before making enquiries can save time and help avoid unsuitable arrangements.
Each section of this site explores these options in more detail, with practical examples drawn from real UK business situations.
Finance enquiries for UK business projects
This form is designed for UK limited companies seeking business finance above £25,000.
Once the form has been submitted, a colleague, Authorised and Regulated by the Financial Conduct, Authority,https://www.financehub.org.uk/will help you. If you have not yet set up a limited company, there are several advantages to doing so, more details can be found here.