Working Capital Loans

Increase cashflow with a Working Capital Loan.
Business Finance Team

Benefits of Working Capital Loans

A working capital loan is similar to a traditional business loan, except it's specifically there to increase working capital, and therefore your cashflow. Once the funds have been credited to your account, it can be used for any day-to-day business expenses, such as bills, rent, and any other costs that hinder your cash flow. A facility such as this can be put in place, to aid you accessing long-term, expensive assets, but more typically to cover business operational costs on a short-term basis. Working capital loans are flexible, meaning it can be increased in times of reduced income. As this is a short term option, the common term time for this product is 12 months, although this can be specifically tailored to suit your company's needs. The undertaking of a credit facility is not a simple process to arrange yourself, although we can make it as easy as possible for you, and your business.

There are numerous advantages associated with a Working Capital Loan. One of the key benefits is the quick and straightforward processing time required to obtain this type of loan. Unlike other financing options available in the Alternative Business Funding market, Working Capital Loans do not involve the lengthy process of securing assets as collateral. Traditional methods such as Asset Finance and Secured Loan products require time-consuming valuations, resulting in delays before funds are disbursed. However, Working Capital Loans are typically shorter-term and do not require collateral, making them faster and more accessible.

Security may be asked of you, only in the case that your business isn't strong enough to fit the criteria for an unsecured facility. A personal guarantee will most-likely be asked of you, although no assets will be taken as collateral, and your valuable business assets will be risk-free.

A personal guarantee is very common with credit facilities, and is used as a way to ensure the borrowed funds will get repaid.Funds can be received within 24 hours of approval, meaning application to exchange of funds can happen within 7 days.  

Other products:

Invoice Finance is a product that allows you to access funds credited to you invoices, removing the stress of lengthy payment terms. We can support business owners in all stages of their growth, from new starts to those trading for 20+ years. Limited Companies and Partnerships can acquire funding through our panel of lenders, for working capital, business expansion (such as recruiting staff, or purchasing an asset) or ongoing projects.

Asset Finance, of which there are two main types. One works similarly to a financial agreement, where an asset is acquired, with payments made over time. This is subject to interest, which is typically around 2%. This allows you access to an asset you perhaps could not afford, if you were only able to make payment as a lump sum on day one.

The other form of asset finance is more simple. It is known as asset refinance, and it involves security against assets. With a refinancing facility, you will gain an injection of cash into your business, via a loan secured against an asset the company had purchased previously. This works similarly to a Secured Loan, which would more typically be secured against a property. With a maximum Loan to Value of 90 percent, you could free up almost all of the value tied up in an asset you own.

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Eligibility

Turnover

Unless you are a new start-up company, the minimum turnover most lenders will deal with is £100,000.

Trading History

Similarly to Turnover, start-up companies can get funding. Once you have filed accounts for the year, we can then apply you as a fully-fledged trading business.

UK Registered Businesses

Due to us dealing with UK Based Lenders, we can only find funding solutions for UK Registered Businesses.

FAQs

How much will a Working Capital Loan cost?
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Working Capital Loans can range broadly in cost. The interest rate will be calculated based upon the strength of your business profile, although the typical interest rate for this product starts from around 4%. This is subject to the state of the market, the industry you oeprate in, the amount of money you are borrowing and what level of security is taken.

Am I eligible for a Working Capital Loan?
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Eligibility varies largely from lender to lender, with some much more flexible, some much less. The basic criteria for applying for a Working Capital Loan is as follows:
- £100k minimum turnover, unless you are a new start-up
- 1 year trading, similarly to turnover, if you are a new start-up you can access funding
- UK Registered Limited Companies

If you don’t meet this criteria it isn’t the end of the road, other funding options are available, and this can be discussed with one of our consultants.

How long does it take to arrange a Working Capital Loan?
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Funds can be received within 24 hours of approval. This means that once your application has been approved, money can be deposited into your account within 7 days. These funds can be used for any business use.

How much money can I get through a Working Capital Loan?
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Typically, advanced amounts of money can be anything between £2,500 and £300,000. The amount you can borrow will be calculated based upon your company's average monthly sales. These funds can be used for any business use

Why choose Spark Finance?
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We are not your average broker. We strive to find you the perfect funding facility for your business, in the easiest way possible. We designate a member of our team of specialist finance consultants to you, walking you through the entire process until the funds are in your hands.

Recovery Loan Scheme

“Would thoroughly recommend using Spark Finance, we had great service all the way through the process from Perry. We will definitely be back should we need any more finance for my business”

Reviews from our clients

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Disclaimer: Spark Finance Ltd (Registered office - 18 John Stow House, London, England, EC3A 7JB, Registered Number 10128297) helps UK firms access business finance. Spark is a credit broker, not a lender. Any quotes provided are for information purposes only and subject to status and separate lender terms and conditions. Applicants must be aged 18 and over.  Guarantees and Indemnities may be required.  Spark Finance may receive commission from lenders.  Spark Finance Ltd is authorised and regulated by the Financial Conduct Authority in the UK (FRN 958123).
© Spark Finance Ltd is authorised and regulated by the Financial Conduct Authority (FCA) in the UK. Their reference number is 958123, and you can use that to find them on the FCA register.