Last updated: 14 Jul 2026
Compare working capital loans from 130+ UK lenders
A working capital loan is short term funding used to cover everyday running costs, such as payroll, stock, rent and supplier bills, when money coming in doesn't quite match money going out.
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Why get a working capital loan with Capitalise?
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What is a working capital loan?
A working capital loan is money borrowed to fund the ongoing, day to day running of your business rather than a single big purchase. It covers the gap between cash leaving your business, on things like wages, rent, stock and utility bills, and cash arriving from customers.
Because it isn't tied to a specific asset or project, a working capital loan is more flexible than a mortgage or an asset finance agreement. Businesses typically use one to get through a quiet season, cover a temporary dip in sales, or bridge the wait between issuing an invoice and getting paid, rather than to fund long term growth like buying property or equipment.
Who uses working capital loans?
Retail businesses
Build up stock ahead of a busy trading period without waiting on cash flow to catch up.
Construction and trade businesses
Cover materials and wages before a client payment comes through.
Hospitality businesses
Manage seasonal dips in footfall without cutting back on stock or staff.
Ecommerce businesses
Bridge the gap between paying suppliers and receiving customer payments.
Agencies and consultancies
Cover payroll and overheads while waiting on client invoices to clear.
How much does a working capital loan cost?
The interest rate, term and the amount you can borrow for a working capital loan depends on your business's revenue, cash flow, credit history and how long you want to repay over. Across the Capitalise lender panel, working capital loans typically fall within these ranges.
Feature | Typical range |
|---|---|
Loan amount | £1,000 to £500,000 |
Repayment term | 1 to 24 months |
Interest rate | From around 1.5% a month, from 6% to 30%+ APR |
Funding speed | As little as 24 hours after approval |
Security | Secured or unsecured options available |
Arrangement fees | Typically 1% to 3% of the loan value, varies by lender |
Get an instant estimate or how much your repayments could be with our free business loan calculator.
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Is a working capital loan secured or unsecured?
An unsecured working capital loan doesn't require any collateral. It's approved based on your cash flow and trading history, which makes it faster to arrange, though rates tend to be a little higher because the lender is taking on more risk.
A secured working capital loan is backed by a business asset or a personal guarantee. Because the lender has security to fall back on, you can often borrow more at a lower rate, though the application usually takes a little longer to arrange.
What are the advantages and disadvantages of a working capital loan?
Advantages of a working capital loan
Disadvantages of a working capital loan
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Am I eligible for a working capital loan?
Most working capital loan lenders will assess:
If you don't meet every criteria, Capitalise works with over 130+ lenders, we can help find the right option for you.
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What documents do you need to apply for a working capital loan?
Having these documents ready will speed up your application:
How to get a working capital loan?
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Check your eligibility
Complete a quick online form with details about your business and funding needs. This helps us understand which working capital lenders may be suitable for you.
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Submit your application
Your funding specialist will helps you prepare and submit the required documents to the working capital lender(s). This allows lenders to assess your business and provide funding offers.
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Compare offers and receive funding
Review and compare available working capital loan offers based on rates, terms, and loan type. Once you move forward with a lender and are approved, funds can be transferred in as little as 24 hours.
What types of working capital finance are available?
There's more than one way to fund a working capital gap, and the right choice depends on how much you need, how fast you need it and how your business gets paid. Here's some common types of working capital loans:
Type of finance | How it works | Typical speed | Best for |
|---|---|---|---|
Working capital term loan | A lump sum repaid in fixed instalments over 1 to 24 months | 24 to 72 hours | A one off gap or a planned cost |
A reusable credit line you draw down and repay as you go | 24 to 48 hours | Ongoing or unpredictable cash flow needs | |
An advance against unpaid customer invoices | 24 to 48 hours | Businesses waiting on slow paying customers | |
An advance repaid as a percentage of future card sales | 24 to 48 hours | Retail and hospitality businesses with strong card sales | |
Funding to pay suppliers or import stock before you've sold it | 3 to 7 days | Businesses funding stock or supplier orders |
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What is the difference between a working capital loan and a business overdraft?
A working capital loan gives you a fixed amount over a set term, so you know exactly what you'll repay and when, which makes it easier to budget for. An overdraft is more flexible day to day but limits are often smaller, can be reviewed or withdrawn by your bank at short notice, and interest is charged only on what you use.
Many businesses use both, a working capital loan for a known gap and an overdraft as a buffer for smaller, everyday fluctuations.
How do you calculate working capital for your business?
Working capital is calculated as current assets minus current liabilities. Current assets include cash, stock and money owed to you by customers, while current liabilities include supplier bills, short term loans and other debts due within a year. Lenders and accountants also look at your working capital ratio, which is current assets divided by current liabilities. As a general guide:
Working capital ratio | What it usually means |
|---|---|
Below 1.0 | You owe more short term than you hold in short term assets, a common trigger for seeking a working capital loan |
Between 1.2 and 2.0 | Generally seen as a healthy balance between meeting obligations and using capital efficiently |
Above 2.0 | You may be holding too much cash or stock rather than reinvesting it in growth |
If your ratio is below 1.0, or you can see a gap coming, a working capital loan is usually the quickest way to close it without waiting on customer payments. Read our full working capital guide for a step by step breakdown with worked examples.
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Are there government backed working capital loan options?
Some working capital finance is available through UK government backed schemes, such as the Growth Guarantee Scheme delivered with the British Business Bank. It supports loans, overdrafts and asset finance up to £2 million, with the government guaranteeing 70% of the lender's exposure, and is currently expected to run until March 2030, subject to review. Capitalise works with accredited lenders on the scheme and can help you check if you qualify.
Get the working capital loan your business needs
Cash flow gaps don't have to slow you down. Compare working capital loans from over 130 UK lenders, and apply to multiple in a single application.