Skip to main content

Growing

Working capital finance options: match the fix to the gap

Working capital finance options only make sense once you know where the gap comes from. Find your gap first, then match the facility to it.

Reading time 5 min read
Category Business guides
Written by The bizbritain team
Working capital finance options only make sense in the right order. First find where the gap comes from. Money owed to you, money sitting in stock, or a season that front-loads your costs. Each has a facility built for it. Picking by product name instead of by gap is how businesses end up in the wrong one.
This guide is the routing we do on the phone, written down.

Section 01

Where a working capital gap actually comes from

Cash leaves before it arrives. That is the whole problem. The useful question is which part of your cycle holds the money longest.
Debtor days. You have done the work and invoiced it, and the cash arrives 30, 60 or 90 days later. The gap lives in your sales ledger.
Stock turn. You paid suppliers for goods that are still on the shelf, or still on the water. The gap lives in your stockroom.
Seasonality. Costs arrive steadily but revenue arrives in bursts. The gap lives in the calendar.
Most businesses have a mix. Fund the biggest one first.

Section 02

Which working capital finance is right for my business?

  1. Slow payers? Invoice finance

    It releases up to 90% of an invoice's value once you raise it. The facility grows with your sales ledger, which suits a growing business with trade customers.

  2. Cash tied up in stock? Trade or stock finance

    It pays suppliers up front and repays from the sale. Lenders assess the transaction, so a strong order book can carry a tight balance sheet.

  3. A lumpy season? A revolving credit facility

    Draw when the quiet months bite, repay when the busy ones pay out. You pay interest on what you use, not on the whole line.

  4. Card-heavy takings? A merchant cash advance

    Repayments flex with your card turnover, priced on a factor rate rather than an interest rate. Business MCAs are usually unregulated, so read the terms with care.

  5. A one-off step change? A term loan

    Hiring, a fit-out, a bigger deposit. When the need is a single step up rather than a cycle, fixed repayments over a fixed term fit best.

Section 03

When a facility is the wrong answer

Working capital finance funds a timing gap. It cannot fund a margin problem.
If the gap comes from selling at a loss, or from a customer who is never going to pay, borrowing widens it. Fix the price, or chase the debt, before you finance it.
The best time to arrange a facility is before you need it. A line agreed early costs little and saves the scramble. Arranging one mid-crisis is harder.
For scale: bizbritain arranges working capital facilities from £25,000 to £10m across a panel of 100+ lenders. Typical time to funds is two to four weeks for most routes.
90%of an invoice's value typically released once a facility is running
2–4 weekstypical time to funds for most working-capital routes
£25k – £10mworking capital facilities arranged across the panel
100+lenders on the bizbritain panel, across one application

Section 04

Where we come in

The routing above is the easy version. Real cases mix gaps, and the right answer is often two small facilities rather than one big one.
bizbritain is an FCA-authorised finance broker. Tell us your debtor days, your stock position and your season, and we will match the facility to the gap. Every route above sits on our working capital routes page.
Planning around a specific squeeze? Our autumn working capital plan for the property trades and our zero-hours reform working capital plan both work through real examples.

This guide is general information, not financial advice. Applications are subject to status, affordability and lender criteria.

Back to business guides

Read the guides · ready to apply?

Got a question the guide didn’t answer? Talk to an advisor.

We’ve backed thousands of British founders. If you’ve read the guide and you’re ready to find out what a Start Up Loan could do for your business, our advisors are on the phone now.

Choose funding Email the team