What it is
Working capital finance covers the gap between paying suppliers and staff and getting paid by customers. Common forms are business overdrafts, short-term revolving loans, invoice and cheque discounting, and import/export facilities such as letters of credit and packing credit.
Because the money is drawn and repaid repeatedly, the cost depends as much on fees and how interest is charged (on the full limit or only the amount used) as on the headline rate.
How to compare
How interest is charged
Overdrafts usually charge only on the balance used, which suits uneven cash flow.
Facility and renewal fees
Annual limit and renewal fees add up even in months you don't draw.
Review period
Most limits are reviewed yearly; know what happens if turnover falls.
Security and margins
Stock, receivables or deposits may be taken as security, with a margin below their value.
Trade-finance capability
Importers and exporters need LCs, guarantees and FX handling, not just a cash line.
What the bank will ask for
- Business registration documents and owners' NICs
- Recent bank statements showing turnover through the account
- Debtor and creditor ageing, stock reports for stock-backed limits
- Audited or management accounts
- Import/export documents for trade facilities
Requirements vary by bank and facility size; this is the usual starting list.
Related business services
SME Loans
Term loans and credit lines for small and medium enterprises, from banks and licensed finance companies — with what to compare and what lenders will ask for before you apply.
Business Current Accounts
The everyday account a business runs on — cheques, transfers, online banking — and how to pick one that fits your volume of transactions.
Business Cash Management
Collect, hold and pay money efficiently across accounts and branches — bulk payments, collections, sweeps and real-time visibility.
Not sure which bank fits your business?
Send one enquiry; we'll come back with the options that match.