Best Cash Flow Loans for UK Businesses

Explore the features of the six best cash flow loans and lenders your UK business can use.

Updated: May 20, 2024
Matt Crabtree

Written By

Matt Crabtree

CompareBanks is reader-supported. When you click through some links on our site, we may earn an affiliate commission. Learn more

Does your company require a cash injection to cover financial obligations? It's not easy to maintain healthy cash flow, but cash flow loans for small businesses may be the perfect option for providing the financial support you need to cover specific expenses.

Multiple business cash flow loans are available to businesses in the United Kingdom, so you may need to narrow down your choices to select the best lender. So, which are the best loans for cash flow for small businesses in the UK?

This article will explore the six best options available to your business. Read on to discover the top choices.

ProviderScoreDetails
1. Century Business Finance★★★★★Click Here
2. Love Finance★★★★★Click Here
3. Fleximize★★★★Click Here
4. Cashsolv★★★★Click Here
5. Johnson Reed Business Finance★★★★Click Here
6. Novuna★★★★Click Here

What Are Cash Flow Loans?

A business cash flow loan is an example of an unsecured or secured loan for small businesses and companies that need to enhance their cash flow.

These loans provide finances for you to complete your day-to-day operations. It is ideal if you need to make payments related to working capital costs, which may include payroll and rent. 

You may wonder, “How does a cash flow loan differ from a small business loan?” The main difference between these and conventional bank loans for businesses is that the latter requires an in-depth credit analysis, while the eligibility criteria of cash flow loans are more relaxed. 

How Do Cash Flow Loans Work?

Since small businesses that seek loans for cash flow do not have an extensive credit history, and lenders do not check their credit score, a lender will typically charge high-interest rates when they grant the loan. This high-interest rate accommodates the risks associated with lending.

If your cash flow loan is unsecured, you will not need to give any collateral to receive the loan. If the loan is a secured type, you must give the lender collateral. When you apply for a cash loan, your lender will evaluate your business's capacity to generate cash flow to determine the loan terms.

What Are the Features of Cash Flow Loans?

Loans of the cash flow type have multiple specific features. Here are three examples to look for when you apply for cash flow finance.

  • Interest rates: The interest rates you must pay back for these loans tend to be high, though they can vary depending on the financial standing of your business. Some cash flow loan interest rates may be as low as 8%, and others can be higher than 35%.
  • Loan term: Specific loan terms refer to the repayment period. The typical repayment terms you can expect range between six and 12 months, a short period compared to alternative financing options. 
  • Principal amount: Loans for cash flow have a principal amount that can vary depending on your business needs. The principal amount refers to the original amount of money you borrow for your loan, which will generate interest. 

Best Cash Flow Loans Pros and Cons

If you are having trouble deciding whether a cash flow loan can help you and are wondering what the perks and drawbacks are, consider the points listed in this section.

Pros

✔️ Unsecured loans for cash flow do not require collateral — If you get approved for one of the unsecured business loans for cash flow, a lender will not require you to put forward any assets as collateral for the risks of lending to your business.

✔️ No need to be approved for a credit score check — Many lenders will not complete a credit score check to approve your loan. This advantage favours your business if your credit score is not as high as some lenders expect.

✔️ Fast access to cash flow financing — Cash flow financing is quickly available from these lenders. You may receive a decision on your application within days and begin to amend any cash flow problems quickly with this cash injection.

Cons

❌️ High interest — Since some of these loans for small businesses are not secured and carry a higher potential risk for cash flow lenders, you might need to pay high interest on top of your principal amount.

❌️ Suitable for short-term financing only — A loan for cash flow is specifically designed as a short-term solution for your business. You may require an alternative business loan if you require a long-term solution

❌️ A personal guarantee may be required — You might be expected to make a personal guarantee to receive the loan. A personal guarantee means you take liability for any repayments if your business defaults on the loan.

Best Cash Flow Loans — Reviews

So now we have covered these loans' features, perks and drawbacks; here are the best cash flow loans available for your small UK business.

1. Century Business Finance

Century Business Finance offers solutions for businesses struggling to pay their bills. Its loans for enhancing cash flow range between £10,000 and £500,000, and the lender expects low rates.

Applying for a loan for business cash flow difficulties takes just two minutes with Century Business Finance. By completing their online form and answering a few questions, you can quickly check your eligibility for this loan. After you submit your application and gain approval, you can receive your money within three days.

Cash flow loans offered by Century Business Finance are approved after you provide year-end accounts documentation and six months of business bank statements. Their loans are not industry-specific, meaning you can apply for this loan regardless of the sector your business belongs to.

This loan is not suitable for consolidating other loans, and approval will depend on the severity of your business credit score. The fewer payment defaults your company has, the greater your chances of being approved; this provider will ensure you can repay the loan.

2. Love Finance

With Love Finance, you can borrow up to £100,000 for a cash flow loan. Their rates begin at just 5.5%, but this will depend on your specific loan term.

This provider uses automated software for the application process, meaning you can potentially receive your cash injection in just four hours after the application. You must request a quote from Love Finance, which will not impact your credit score.

The process you will need to follow to receive your funds includes making an application, receiving a quote within two minutes, waiting for approval, signing your documents electronically, and receiving the finance in your business account in 24 hours.

The terms of Love Finance's loans for cash flow are flexible. You will be able to receive terms of up to five years. Some specific factors business owners may spend their loans on include covering large invoice gaps or bills, paying VAT loans, or taking care of wage expenses.

3. Fleximize

Fleximize will help your business get a cash injection quickly. The funds you can receive begin at just £5,000, with the maximum loan amounts equating to £500,000, and the lender offers rates that start at just 0.9% per month.

To apply for a cash flow loan through Fleximize, you can check your eligibility by completing the online form. A few questions you must answer include the time you will need funding, the amount you require and the reason you request finance. 

You must also provide information about your business and state when you will require the funds. Approval for this loan will take as little as one day, meaning you will not have to wait long to hear the results of your application.

Once approved for this loan, the interest you will have to pay is based on a reducing balance. Therefore, you will not pay interest on the total loan amount. The loan term will be as low as three months and as high as 48 months.

4. Cashsolv

Cashsolv is a business finance company that offers cash flow loans from £20,000 to £250,000. There are a few steps to follow to borrow money from this lender.

You will need to meet with a Cashsolv representative and share information about your business to help them assess your eligibility for short-term loans. You must also sign a finance agreement and make a personal guarantee, which may require additional legal advice.

Cashsolv will ask you to provide documents representing your business's financial accounts, identification documents, and additional paperwork to show that you can repay the loan.

The application is a quick process; if you are eligible, you will receive funds within 24 hours. The loan terms range from one month to 12 months, and your application will not impact your credit score.

Two other advantages of Cashsolv's short-term business loans are that the interest you receive is based on the remaining balance, not the principal amount, and you can choose when to repay your loan.

5. Johnson Reed Business Finance

The short-term business loans offered by Johnson Reed Business Finance range from between £2,000 and £500,000. The minimum loan term is three months, but they also offer loan terms of up to five years with their long-term financial solutions.

You can apply with Johnson Reed Business Finance by requesting a quote from this lender. Simply complete the form and enter your details to contact a representative.

You can potentially receive approval in just two hours, and this lender will give you access to funds within 24 hours after approval.

This lender also offers loan calculators and a helpful team to provide the support your business needs to manage the process from the beginning of the agreed term to the end.

6. Novuna

Novuna provides cash flow loans to keep your company performing well despite cash shortfalls. You can use the funds to purchase machinery, hire additional employees, and for a range of business operations.

This lender offers secured loans and unsecured loan types and has specific eligibility criteria. Your turnover should be less than £6.5m, and your balance sheet total should exceed £3.26m.

The number of employees you have should not exceed 50, and you will need to provide statements from your business accounts. Most importantly, you should be able to repay the loan.

Novuna will consider your credit score and expect you to have a score of 600 for approval. You could be eligible for funds between £5,000 and £200,000 upon approval. Loan application processes are fast, and approval can take just 24 hours.

You can expect a loan term of between one and 12 months, and the application process will not affect your credit history.

Best Cash Flow Loans: The Verdict

Cash flow loans for small businesses can provide a short-term benefit to your operations when you have a cash shortfall. Several companies offer these loans, and many can meet your business's requirements. But it is always best to look at the specific terms, rates and eligibility criteria before you choose one.

With the features, pros and cons in mind, compare cash flow loan lenders to find a suitable option for your company and receive the cash injection you need.

Related Guides:

FAQs

Are Cash Flow Lenders Regulated?

What Is the Difference Between a Direct Lender and a Broker?

Does Cash Flow Mean Profit?

Related Articles

The Average Business Loan Interest Rates for 2024
Business loans are a powerful tool for helping companies of all sizes reach their...
Company Guide: Will Bounce Back Loans Be Written Off?
It goes without saying that keeping your business financially stable throughout...
Do Bad Credit Bridging Loans Exist?
Learn what financing options you have available to you if you're someone with less...
Best Bridging Loan Companies UK
The process of selling a house isn't usually quick, and if you've already got your...