Many businesses seek out loans to help improve their cash flow or working capital to assist them in financing their everyday operations. This is what a working capital loan is designed to cater for and not for purchasing assets or investments. These can help pay wages, rent, debt and safeguard against seasonal fluctuations. Below we have explored what the leading providers of working capital loans can offer.
Companies are ranked in no particular order.
|Company||Min Loan Amount||Max Loan Amount||Max Term|
|Just Cashflow||£50,000||£1 million||12 months|
|Rangewell||Not stated||Not stated||Not stated|
|ThinCats||£1 million||£15 million||5 years|
|Ultimate Finance||Not stated||£5 million||Not stated|
|White Oak||£25,000||£1 million||12 months|
1. Just Cashflow
- Working capital loan or revolving credit facility for property professionals
- Designed for the refurbishment of existing portfolio or new property purchase
- Borrow up to 80% loan to value
- Terms up to 12 months
- Funding from £50,000 to £1 million
- Interest rates from 0.041% (1.25% per month)
- Monthly repayments by Direct Debit
- Secured as 1st or 2nd charge on the property
- An arrangement fee of 1-3% applies
- Apply over the phone
- Quick and simple working capital loan
- Meet short-term funding needs
- A lending decision in 24 hours
- Borrow from £5,000 to £500,000
- Terms from 6 months to 5 years
- Transparent fees
- A minimum rate of 5.95%
- Allows one-off overpayments and early repayment with no charges
- An experienced team will find a lender from their community of lenders
- Apply online or call them
- Provides affordable working capital loans
- They offer a brokerage service
- Short-term funding
- Supports cashflow
- The loan can be set up as a precaution at no cost
- Competitive rate
- Rates start from 2% above the base rate
- Funding can be put in place quickly
- Can be provided as part of a wider funding package
- Call them to apply
- Offers working capital loans to provide effective cash flow management
- Short-term loan up to 24 months
- Flexible and transparent
- Provides a credit line that can offer funding within a working day
- Borrow from £50,000 to £350,000
- Monthly interest rates start at 1.4%
- 3% arrangement fee applies
- A dedicated client service team
- You must have a turnover above £500,000 and have been trading for more than 3 years
- Apply online
- Provides loans to increase working capital
- Suitable for mid-sized SMEs
- Borrow from £1 million to £15 million
- Terms from 1 to 5 years
- Maximum loan to value of up to 85%
- Fixed interest rates
- Flexible repayment terms
- Loans can be used for a variety of purposes
- Offers specialist lending for private equity, healthcare and leisure sectors
- Apply through an advisor
6. Ultimate Finance
- Offers a range of loans to increase working capital
- Tailored solutions
- Dedicated funding experts will help you get the right finance in place
- Invoice finance with funding up to £5 million and 95% invoice values
- Construction finance offering up to £1.5 million funding
- Recruitment finance with funding up to £5 million and 95% pre-payment
- Trade finance of £25,000 to £1 million
- Can combine financing options
- Personal dedicated Relationship Manager
- Request a quote online
7. White Oak
- Offers flexible working capital loans
- Designed for SMEs and mid corporates
- Enhance your cash flow
- For short-term funding needs
- Can be used for a range of purposes
- Borrow from £25,000 to £1 million
- Terms from 3 to 12 months
- Interest-only options available
- Must have been trading for more than 3 years
- Apply online or request a callback
How does a working capital loan work?
Working capital loans are similar to other loan products but are designed to increase cash flow rather than for purchasing or funding specific assets or property.
The loan can be taken out as a secured or unsecured loan depending on the lender’s offering and will be repaid monthly over the agreed term.
Generally, working capital loans are for shorter periods up to 5 years as they are designed to help even out the working cash flow.
Some providers offer invoice finance as part of their working capital loan products. Invoice finance allows you to get a cash advance on unpaid invoices which is repaid when your customers pay their invoices.
How much can I borrow?
The amount you can borrow will depend on the lender and the product you are applying for as different loans vary. Some providers offer loans as low as £5,000 and as high as £15 million.
How much will a working capital loan cost?
Working capital loans like must loans have an interest rate applied to them which will vary depending on the lender and their product offering. The rates can vary from 1.25% to 5.95% per month.
There are also other fees to factor in which can include arrangements (typically up to 3%) and brokerage fees if you use a broker.
How long can I borrow money for?
The length of time you can borrow the money will vary depending on the lender and the type of product you select but typically working capital loans are short to medium terms loans from 1 to 5 years.
How to apply for a working capital loan?
If you want to apply for a working capital loan many lenders will allow you to apply or enquire online.
Others request that you call them to discuss your needs with them and to apply. Many providers have some prerequisites about how long you have to be trading for and what your turnover is for you to be eligible for their loans so it is worth checking all the criteria first.