What to remember
- Match borrowing duration to when the business collects cash.
- Separate stock funding from equipment or property investment.
- Request quotes against the same plan at each bank.
Working capital
For inventory and suppliers, compare collection timing with repayment dates. An overdraft may allow flexible use within a limit, while an instalment loan has a repayment schedule. Check charges on unused limits too.
Investment and collateral
For machinery or premises, prepare an investment plan and collateral documents. Ask about accepted collateral value and seasonal repayments. An advertised maximum term is not the term you are guaranteed.
Individual quotations
When pricing is unpublished, request written quotes for the same scenario from each bank. For POS, ask for transaction fees, monthly costs, settlement timing and termination conditions.
Plan cash coming in and going out
List monthly expected collections and supplier, payroll, rent, tax and debt payments. Accounting profit is not always cash in the bank: invoices may be collected later. If ALL 400,000 is due to suppliers now and customer payments arrive in two months, there is a temporary funding gap. Test delayed or lower collections before choosing finance.
Illustration, not a bank offer. These figures are assumptions used to explain the calculation.
What to prepare for the bank
Request a document list for your business type. Prepare registration details, financial statements, account movements and the purpose of borrowing. For investment, include equipment quotations and a repayment plan. If property or personal guarantees are requested, ask for a separate explanation of obligations and costs. Do not assume business finance follows personal-loan terms or protections.
For a shop: buying premises or running the business?
Buying premises, funding stock and accepting card payments are different needs. Compare property finance, short-term funding and payment services separately. For POS, estimate monthly transaction value and volume. Ask about card-specific fees, fixed charges, settlement timing, refunds and disputed payments. Compare quotes for identical usage.
Questions to take to the bank
Use this list when requesting your written offer.
- What do I pay when the facility is unused?
- Can repayments match business seasonality?
- Which guarantees are required and what do they cost?
- What is the cost including the account and other services?
Frequently asked questions
Is turnover the same as cash available for repayments?
No. Sales must cover expenses and may include unpaid invoices. Check cash remaining in the month repayments are due.
Is there one rate for every business?
Not necessarily. If pricing for your situation is unpublished, request a written quote. Missing rates do not mean zero interest.
Sources and examples
Links beside specific explanations identify their official sources. Worked examples are educational assumptions, not bank offers. The bank confirms the terms for your situation.