Business borrowing starts with cash flow
Plan repayment around the way your business earns and spends money.
Match borrowing to its purpose
Distinguish a short-term working-capital gap from a longer-term investment. Stock purchases, delayed customer payments and equipment can create different funding needs. Explain the purpose clearly before comparing loan structures.
Map the money coming in and out
Prepare a monthly view of receipts, operating costs, existing repayments, taxes and owner withdrawals. Include seasonal changes and slow customer collections. Sales or revenue on its own is not the amount available for a new EMI.
Test a quieter month
Consider what happens if receipts arrive late or a key expense increases. Compare the proposed repayment with cash available after essential expenses. Keep assumptions visible so you can discuss the numbers with your accountant and lender.
Prepare a consistent file
Organise bank statements, business information, financial statements and tax records requested by the lender. Requirements differ by product and applicant. Reconcile inconsistencies before submission and confirm the lender’s current checklist rather than assuming every business needs identical documents.
Map the funding gap against collections rather than turnover
For each week in the planned period, list cash available at the start, expected customer receipts, operating payments and existing debt service. Separate confirmed receipts from hoped-for orders. The lowest cash point reveals a different requirement from the year's total sales or profit.
Explain whether the funding pays for a long-lived asset, a seasonal cycle or a recurring mismatch between paying suppliers and collecting from customers. The facility should fit that use. An instalment calculator models a term loan; it does not reproduce an overdraft or every revolving-limit charge structure.
Test a slow-collection case before choosing an amount. Additional borrowing creates a repayment obligation even if the expected sale is delayed. Review the underlying problem if debt is being used repeatedly to fund operating losses rather than a temporary timing gap.
| Period | Information to record | Decision supported |
|---|---|---|
| Before delivery | Purchases, staff and other cash outflows | How much is needed before receipts arrive? |
| During delivery | Milestones and customer advances | Can the gap be reduced by better terms? |
| After billing | Collection dates and uncertainty | When can the proposed facility be repaid? |
| Slower scenario | Delayed receipts and fixed commitments | What buffer or staged spending is needed? |
What should accompany a business loan enquiry?
Prepare the purpose, timing and approximate amount, existing obligations and relevant records you can share through an appropriate secure process. The initial Credswitch form records your requirement; it does not verify business eligibility or request uploads of financial documents.
Expanded 2 November 2026. Examples are hypothetical; adapt the worksheet to your circumstances.