Not every cashflow problem is a sign of a failing business. Sometimes it is simply a matter of timing — money is owed to you, but it has not arrived yet, and in the meantime you have wages to pay, stock to buy, or a supplier to settle. Short-term business finance exists precisely for this situation.
When short-term finance makes sense
Short-term finance is worth considering when:
- You have confirmed, collectable receivables but they will not clear in time to meet an imminent obligation
- You have a one-off, time-sensitive cost — a bulk stock purchase, a renewal, a tax bill — that falls at an awkward point in your cash cycle
- You want to protect a key supplier relationship rather than risk damaging it by asking for extended terms
It is less appropriate as a long-term subsidy for a business that is consistently spending more than it earns. If that is the position, trading performance needs to be addressed alongside any financing.
Types of short-term facility
A revolving credit facility — such as Credicorp Flex — lets a company draw funds up to an agreed limit, repay as cash comes in, and redraw again. This suits businesses with cyclical or irregular income because you only borrow what you need and repay when you can. A fixed short-term loan provides a lump sum repaid over a defined period, which suits a one-off cost with a known repayment profile. For a single large bill, a product like Credicorp Slice spreads the cost over three or four weekly instalments at a flat fee, avoiding a large one-off impact on the current account.
What to check before borrowing
Make sure the repayment schedule aligns with when you expect cash to arrive — not just with what looks comfortable on paper. If you are uncertain whether the underlying cashflow gap is temporary or structural, take free advice first before committing to repayments.
We lend only to UK limited companies and LLPs, and the loan is to the company with no director personal guarantee. As business finance outside the consumer-credit regime, it is not covered by the Financial Ombudsman Service or FSCS.
See also: The difference between insolvency and a cashflow gap, Options before a cashflow problem escalates.