Choosing the wrong funding tool can cost more, slow decisions, and create cash-flow friction. This practical guide shows you how to pick the right finance for the right job – whether you’re covering short-term gaps or backing long-term growth. Along the way, you’ll find clear routes into our most popular options so you can compare structures in minutes.
Need a fast overview? Start with Business Loans, then compare Invoice Finance, Revolving Credit Facility, Asset Finance and Asset Refinance.
Growth capital vs working capital — what’s the difference?
Working capital covers the timing gap between cash out and cash in. Think payroll, materials, stock, and delivery costs while customers pay on 30–90 day terms.
Growth capital funds longer-horizon investments—a new site, major equipment, product launches, hiring plans, or a refurbishment that pays back over months or years.
Rule of thumb:
“Use revolving or invoice-backed facilities for gaps. Use term-style funding for growth.”
Your decision tree (4 quick questions)
Q1. What’s the purpose and payback horizon?
Under 90 days: cover a timing gap → consider Invoice Finance or a Revolving Credit Facility.
Over 6–12 months: fund a project or asset → consider Business Loans or Asset Finance.
Q2. Is there a specific asset involved?
Yes (vehicles, machinery, tech): match cost to use with Asset Finance.
No asset: choose a loan or revolving line based on timing and flexibility.
Q3. Is your cash need recurring or one-off?
Recurring dips: Revolving Credit or Invoice Finance scale with turnover.
One-off spend: a loan or asset facility keeps repayments predictable.
Q4. How quickly do you need funds?
Urgent (24–72 hours): explore Same-Day Business Loans where documents are ready, or draw on an existing revolving line/invoice facility.
Planned: secure the most suitable structure at best overall value.
The funding toolkit (and when each fits best)
Invoice Finance – fund the gap between invoice and payment
Turn approved invoices into cash so working capital moves with sales.
Best for: B2B terms of 30–90+ days; fast-growing ledgers.
Variants: Invoice Factoring (outsourced collections) and Invoice Discounting (you keep control).
Why choose it: scalable with turnover; reduces pressure from late payers.
Revolving Credit Facility – draw, repay, re-use
A reusable line for short, repeat dips.
Best for: seasonality, small timing mismatches, opportunistic buys.
Why choose it: pay only on funds in use; quick to redraw.
Business Loans – a lump sum for projects and expansion
Fixed-term funding for clear initiatives.
Best for: stock builds, refurb, marketing, hiring, consolidation.
Explore: Unsecured (no physical security) and Secured (higher amounts/longer terms).
Need speed? See Same-Day Business Loans.
Asset Finance – match repayments to the life of the kit
Fund vehicles, equipment or tech over a fixed term.
Best for: capex with measurable ROI or efficiency gains.
Why choose it: keeps cash free for operations; predictable budgeting.
Asset Refinance – release equity from owned equipment
Raise funds against vehicles or machinery you already own.
Best for: working capital, projects, or consolidation without selling critical kit.
Merchant Cash Advance – card-linked repayments
Repay via a share of card takings.
Best for: retail/eCommerce with strong card revenue and seasonal patterns.
Quick chooser table (gap vs growth)
| Scenario | Typical Need | Strong Options |
|---|---|---|
| Waiting 45–60 days on invoices | Working capital gap | Invoice Finance, Revolving Credit |
| Stock buy for a short promotion | Short-term, repeat use | Revolving Credit, Same Day Business Loans |
| New hire team + marketing push | Defined project (6–18 months) | Business Loans |
| New machine to increase capacity | Asset with measurable ROI | Asset Finance |
| Cash from kit you already own | Liquidity without selling | Asset Refinance |
| Lean team wants collections support | Funding + admin relief | Invoice Factoring |
| Strong credit control, wants confidentiality | Funding with in-house collections | Invoice Discounting |
Build a “funding stack” that fits how you trade
Many UK firms pair invoice finance (for receipts timing) with a revolving line (for small day-to-day dips) and bring in a business loan or asset facility when they commit to growth projects. The stack approach keeps costs aligned with usage and reduces strain during busy periods.
What lenders commonly consider
Time trading and recent performance
Bank statements and cash-flow profile
Debtor quality/aged debt (for invoice facilities)
Asset age/spec and provenance (for asset funding)
Existing commitments and affordability headroom
Your dedicated account manager will outline exactly what to provide and package the application cleanly.
How we work (clear and simple)
Understand your goal – amount, purpose, timing, preferred structure
Scan the market – we compare options across a large UK lender panel
Present clear choices – terms, features, and estimated repayments
Coordinate documents – keep momentum and resolve queries quickly
Payout & follow-up – we stay available as your needs evolve
FAQs: choosing the right business finance in 2026
- How do I decide between a loan and invoice finance?
If the issue is timing of receipts, invoice finance usually fits. If you need a defined lump sum for a project or expansion, a loan often suits better. - Can I mix products without overcomplicating things?
Yes. A simple stack-invoice finance + revolving line-covers gaps, while a loan or asset facility funds growth. We’ll keep structures clear and manageable. - What’s fastest if I need funds this week?
Where documents are ready, Same-Day Business Loans may complete quickly. Existing revolving or invoice lines can also be drawn rapidly. - I’m buying equipment-loan or asset finance?
If the spend is for a specific asset, Asset Finance typically aligns repayments to the asset’s life and ROI. - Can newer businesses access funding?
Some lenders consider earlier-stage firms, especially where there’s sector experience, clean documentation, and credible contracts or orders. - Will I need security or guarantees?
Unsecured loans rely on trading strength and may include guarantees. Secured loans and asset facilities use property or equipment as security. We’ll outline requirements upfront. - Can I refinance expensive borrowing?
Often yes-via Asset Refinance, consolidation with a Secured Loan, or transitioning to Invoice Finance. - How do I keep costs under control?
Match the tool to the job, avoid using long-term loans for tiny timing gaps, keep ledgers clean, and review utilisation so you only pay for what you use. - What documents should I prepare first?
Recent bank statements, accounts/MI, and-where relevant-aged debtors or asset details. - What if my needs change after approval?
Many facilities allow top-ups, limit changes, or switch paths (e.g., upgrade kit under Asset Finance). Tell us early and we’ll map the options.
Related pages
Working capital: Invoice Finance · Revolving Credit Facility
Loans: Business Loans · Unsecured · Secured · Same-Day
Assets: Asset Finance · Asset Refinance
Card-linked: Merchant Cash Advance
Ready to choose the right tool first time?
Share your goal, timeline, and key figures. We’ll compare options across our panel, present clear choices, and keep everything moving to payout-so you can get on with growing the business.
We do not publish definitive rates. Availability and terms depend on lender criteria, credit profile, documentation, and-where relevant-the quality of assets or invoices.
