Finance solutions

Business Finance Solutions

Most guides to business finance assume you are starting from a clean sheet. Many UK businesses are not. They already carry a loan, an overdraft, a card balance or a merchant cash advance, and the question is how new finance fits around what is already owed. This hub explains the ten routes we cover, what each replaces or adds, and which situations they tend to suit.

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Tell us a little about your business and we will explain the options. No obligation, and enquiring does not involve a credit search.

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Approximate existing business debt *

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Ten routes, three jobs

Finance that replaces debt, renegotiates it, or funds the business around it

The solutions below do one of three things. Some replace existing borrowing with a new agreement. One changes the terms of debts you already have without new borrowing. The rest add funding for stock, wages, invoices or equipment so that the business can keep trading while it services what it owes. Each page covers how the product works, who it may suit, what it costs and where the risks sit.

Business Debt Consolidation

Replace several business debts with one new facility, one repayment and one end date.

Consolidation explained

Business Debt Refinancing

Swap an existing agreement for a new one with a different rate, term, security or repayment profile.

Refinancing explained

Business Loan Refinancing

Refinance one specific loan, such as an expensive unsecured loan or one with a balloon payment due.

Refinancing a single loan

Business Debt Restructuring

Renegotiate the terms of existing debts with creditors rather than borrowing again.

Restructuring explained

Cash Flow Finance

Bridge the gap between money going out and money coming in with revolving or short-term facilities.

Cash flow finance options

Working Capital Finance

Fund day-to-day operating needs such as stock, wages and supplier payments.

Working capital options

Secured Business Loans

Borrow against property or other assets, often for larger sums or longer terms, with the asset at risk.

Secured lending explained

Unsecured Business Loans

Borrow without pledging a specific asset, usually with a personal guarantee from directors.

Unsecured lending explained

Invoice Finance

Release cash tied up in unpaid invoices through factoring or confidential invoice discounting.

Invoice finance explained

Asset-Based Lending

A facility secured on a combination of receivables, stock, plant and property.

Asset-based lending explained

Compare the routes

Which route fits which situation?

The table summarises how the ten solutions differ on four points that matter most to a business that already has debt: what the finance is for, whether it replaces borrowing you already have, whether security is usually required, and the main risk to weigh up. Practice varies between providers, so treat it as a starting point rather than a rule.

Solution	Typical purpose	Replaces existing debt?	Security usually needed?	Main risk
Debt consolidation	Combine several facilities into one	Yes, two or more facilities	Often a personal guarantee; sometimes an asset	A longer term can raise the total repaid
Debt refinancing	Change the rate, term or security of existing finance	Yes, one or more agreements	Depends on the new facility	Break costs and a reset repayment clock
Loan refinancing	Replace one specific loan	Yes, a single loan	Usually a personal guarantee if unsecured	Early repayment charges outweighing the saving
Debt restructuring	Renegotiate terms with existing creditors	No, terms are varied	Not usually, though lenders may ask for more	Credit record impact; covenant and default clauses
Cash flow finance	Cover short gaps between outgoings and income	No, adds a facility	Varies; MCAs rely on card takings	Dependence on short-term, high-cost borrowing
Working capital finance	Fund stock, wages and suppliers	No, adds a facility	Often a personal guarantee	Adds to total borrowing and monthly commitments
Secured loans	Larger or longer-term borrowing against assets	Can be used to replace debt	Yes, a charge over property or assets	The asset can be repossessed on default
Unsecured loans	Quicker borrowing without pledging an asset	Can be used to replace debt	No asset, but a personal guarantee is standard	Higher cost; directors' personal exposure
Invoice finance	Advance cash against unpaid invoices	No, though it can repay an overdraft	Yes, the sales ledger	Ongoing fees; customer concentration limits
Asset-based lending	Larger facility secured on several asset classes	Often refinances existing facilities	Yes, receivables, stock, plant or property	Reporting burden; facility can shrink with asset values

Still unsure where to start? Our guide to comparing business finance offers explains how to put different products on a like-for-like footing, and the debt comparison tool lets you test figures of your own.

How we work

Information first, introductions only if you want them

Finance Business Debt is not a lender. We explain how each type of business finance works, what it tends to cost and what the risks are, so that you can go into any conversation with a provider knowing what to ask. If you decide you want to take things further, we may be able to introduce you to a third-party finance provider or specialist adviser. There is no obligation at any stage.

1
Describe the business
Trading structure, sector, time trading and approximate turnover.
2
Describe the existing debt
Balances, rates, terms, security and any personal guarantees already given.
3
Understand the options
We explain which of the routes above may be relevant and what each would involve.
4
Decide what happens next
If you want an introduction, we explain how that works and what a provider will need from you.

A business that is already missing payments or facing enforcement should read our business debt help section before taking on any new finance, and may need free, impartial advice from Business Debtline or a licensed insolvency practitioner. Our how it works page describes the enquiry process in more detail.

Not sure which finance solution fits?

Tell us what the business owes and what it needs. We will explain which of these routes may be worth reading about and what to check before you commit to anything.