Cashflow Loans

  A cashflow loan is a type of business loan that is used to improve or manage a businesses cash flow. These loans help businesses cover short term financial gaps, ensuring that they can continue to operate the business, pay bills, meet other financial obligations without disruption to the business itself.

Key details about cashflow loans:

Purposes of cashflow loans:

1) Covering short term gaps in cashflow, these types of loans are used to cover temporary shortfalls in cash, examples of this would be:

· Paying suppliers 

· Paying staff 

· Any other operational expenses (fuel, insurance, vehicles expenses)

2) Business Growth- some businesses may use cashflow loans to help with funding growth initiatives, a example of this would be when the business if waiting for payments from customers or other sources of income.

3) Smooth Cash flow- This is ideal for businesses that experiences fluctuations in cash flow, such as seasonal income or businesses that have a longer payment cycles from clients, an example of this would be a government or council contract you may need to wait 90 days for payment of the completed work, however need to pay staff and other expenses in the meantime.

Different types of Cashflow loans

· Short term loans- typically range from a few months to a year.

· Overdrafts- A business overdraft can help with temporary cash flow shortages, allowing your business to spend more that its current account balance or pre agreed limit.

· Invoice financing- this is a form of cash flow which we go into more detail on our invoice financing page.

Interest Rates- Cashflow loans do tend to have a higher interest rate compared to traditional long-term loans. This is due to the shorter loan term and the risk involved for the lender.