A cash flow loan is a type of unsecured loan used to help businesses manage their cash flow. The loan is usually reliant on the future cash flows of the company to ensure repayment of the loan.
The funds raised by cash flow funding are generally used to cover the daily operations of the business such as paying bills, rent, training employees and staff wages.
How does Cashflow funding work?
Cash flow financing uses the generated cash flow as a means to pay back the loan rather than the physical assets of a business.
Cash flow funding is a good option for seasonal or businesses that find themselves in short supply of working capital for periods of the year or businesses that do not have a many physical assets. Whilst sales or cash flow may fluctuate, and decline during certain periods of the year, the business costs remain consistent, and a cash flow loan can help the business maintain a steady balance book.
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