What can company finance be used for?

How to use company finance in your business

Business finance can be used for a multitude of purposes within a company, from boosting general cash flow to funding development projects and buying stock. Its flexibility and adaptability to an individual business’s needs make it ideal whatever stage of business you’re at. 

Obtaining independent advice and presenting a convincing business plan are just two considerations before applying for company finance but here are a few examples of how you could use it to improve business operations and plan a sustainable future.

Stabilise or boost cash flow with invoice finance

Cash availability lies at the heart of business success so ensuring healthy cash flow in your company is paramount. Invoice finance provides stability for day-to-day business activities – it pays the bills but can also support longer-term projects. It works by releasing the value held within your unpaid invoices, which would typically remain unavailable to you for 30, 60, or even 90 days.

Buy new assets with asset financing

Asset finance helps you to purchase new expensive assets that may otherwise be out of reach financially. Asset finance typically involves taking out a hire purchase or lease agreement and repaying it on a fixed monthly basis. You could use the funds to buy new equipment or machinery, for example, and in doing so boost production and support larger orders or perhaps expand your customer base.

Purchase inventory with stock finance

Stock finance helps you control cash flow and is particularly beneficial for seasonal businesses. It’s a form of short-term working capital finance that’s quick to access but as well as buying stock you could also use it to pay wages or develop new marketing strategies.

Expand the company using a secured loan

Secured business loans provide flexible funding that supports expansion. You may be able to access lower interest rates or higher amounts by providing a business asset as collateral. Providing security can also open up access to longer loan terms of up to 10 years, which would help with monthly cash flow.

Paying tax bills/arrears with HMRC loans

HMRC arrears can lead to unwanted scrutiny from the tax body but HMRC loans help to prevent the common downward spiral that often results from hefty penalties and interest payments. These loans are usually unsecured and you make fixed monthly repayments, generally for up to 18 months.

Versatile forms of company finance for your business

These are just a few ways in which company finance can be used, but there are many more options available that we can advise you on. You can use existing assets, such as machinery or equipment, to release cash and grow the business, for instance.

Furthermore, if you’re considering investing in commercial property, either as a landlord or for your own business’s use, a business mortgage and/or bridging loan will help you navigate the complex commercial property market.

For more information on how you can use company financing, please get in touch with our team at UK Business Finance. We’re highly experienced commercial finance brokers and will ensure you secure the right type of funding for your needs following a whole-of-market approach.