Working Capital Loans

Last updated: 08/05/2025

Working Capital Loans for UK Businesses

A working capital loan is an excellent option for businesses that need short-term financing to manage their day-to-day operations and ensure smooth cash flow.

Working capital loans provide businesses with the funds to cover expenses such as payroll, inventory, or other operational costs. These loans are typically used to bridge the gap between income and expenses, without having concerns over running out of funds during slower months.

What is a Working Capital Loan?

A working capital loan is a type of loan that provides businesses with the funds needed to cover every day operational expenses. Unlike traditional business loans, working capital loans are specifically designed for businesses that need immediate access to cash to meet their day-to-day needs. These loans are typically short-term, ranging from a few months to a year, and can be used for various purposes, including paying for inventory, wages, utilities, and other short-term business expenses.

Working capital loans are often unsecured, which means you don’t need to provide assets as collateral. As a result, they’re a more accessible option for businesses that may not own significant assets or want to avoid the risk of using assets as security.

Benefits of Working Capital Loans

Some of the benefits of using a working capital loan include:

Quick access to funds: Get the cash you need to keep your business running.

Flexible use of funds: Can be used for a wide range of business expenses, from payroll to inventory purchases.

Unsecured loan option: No need to offer assets as collateral.

Short-term financing: Ideal for businesses in need of immediate cash flow solutions.

Improved cash flow management: Keep your business operational during slow periods or unexpected costs.

How Does a Working Capital Loan Work?

Once you get in touch with us, we’ll ask for some information about your business, such as your latest set of accounts, bank statements from the last six months, and details of the business directors. This helps us determine the most suitable loan options for your needs.

We’ll then apply to our wide panel of funders, who will usually provide an answer within 48 hours. To comply with regulations, we will also carry out identity and Know Your Customer (KYC) checks for both the business and its directors.

After confirming the loan terms and agreeing to the conditions, you’ll receive the loan agreement to sign. Once all checks are complete, the funds will be transferred to your business account, typically within a few days, allowing you to use the working capital to cover your business expenses.

Things to Consider for a Working Capital Loan

Loan Amount: The amount of working capital you can borrow will depend on your business' financials and needs.

Purpose: Working capital loans are for short-term business needs, such as payroll, inventory purchases, or covering operational costs.

Loan Term: Typically a short-term loan with a repayment period ranging from a few months to a year.

Repayment Flexibility: Repayment terms can vary based on your business’s cash flow and the lender's terms.

What Can I Use a Working Capital Loan For?

Payroll: Ensure your employees are paid on time, even during slow months.

Inventory purchases: Stock up on essential products or raw materials to meet customer demand.

Operational expenses: Cover utilities, rent, and other day-to-day costs.

Paying suppliers: Keep good relationships with your suppliers by ensuring timely payments.

Debt management: Use the loan to manage short-term debts and ease cash flow issues.

Alternative solutions to a working capital loans

Small Business Loan: This loan provides the opportunity to small businesses to secure funding to purchase equipment, facilitate growth and provide cash flow for day-to-day operations.

Unsecured business loan: A loan that provides finance for businesses based off their creditworthiness, rather than having to use business assets as collateral.

Applying for a working capital loan

MAF Finance Group works with a wide selection of banks and funders to provide the financial solutions that works best for you.

If you would like to get a quote or need further information, fill out the form and a member of our team will be in contact with you. If you want to speak to us directly, you can call us 0115 958 6872. Alternatively, email us at [email protected].