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Cash Flow Business Loans for SMEs

Want to know more about cash flow business loans for SMEs? Keep on reading to find out more.
Cash Flow Business Loans for SMEs

If you’re looking to find out about how to increase cash flow in your business, keep on reading. In this blog post, we’ll look at cash flow business loans and how they could help your business.

No matter the size or sector of your business, managing cash flow can be a stressful experience. However, cash flow for SMEs can be particularly turbulent. With cash flow highly dependent on factors such as seasonal change or unexpected fees, it’s important to understand how to get finance for a small business and when this might be the best solution.

What is a cash flow loan?


Cash flow loans are a type of short term business loan that is widely available to the majority of businesses. They are an example of an unsecured business loan and are often used in strengthening cash flow and to help combat financial stress.

Cash flow loans are appealing as they base their acceptance on business performance and expected credit flow. This differs from alternative business loans which primarily base their approval on credit scoring meaning that many more businesses, including SMEs, are eligible for cash flow loans.

An additional benefit of opting for this form of finance is that they work well as emergency business loans. If something unexpected crops up in your financial year, and you need the money as quickly as possible, cash flow loans are particularly helpful in offering speedy solutions.

Depending on the loan (and loaners) you choose to partner with the criteria for approval will differ. Although, generally speaking, the business must have been trading for a minimum of two years and be looking to borrow a figure above £5,000.

Why would I need to use a cash flow loan?


A lot of small business owners often assume it’s not possible to get a loan for their business. Cash flow loans are a great example of a loan with a high acceptance rate – regardless of size. However, as cash flow loans are a form of short term funding, it’s important to understand that naturally they shouldn’t be considered a long term solution to cash flow issues. So, how do you know if they are the best option for your business?

To start with, you should understand why cash flow is important to a small business. Two of the main factors are; that smaller businesses don’t tend to have the same level of financial backing; or opportunity to get alternative loans easily.

To understand your cash flow you need to work out:

(Cash + Income) – Expenditure = Cash Flow

You should also consider creating a cash flow forecast, this means using the above formula but with estimates for the future. Doing this will help you create an image of what the future looks like for your business, and assist you in creating a plan for the dryer seasons. Once you have managed your financial expectations, you might feel it necessary to enlist the assistance of a cash flow loan.

What are cash flow loans for?


The reason for a loan differs from case to case, some of the most popular reasons are:

  • Businesses that are affected by seasonal trade
  • Looking to make an investment in a new venture
  • Prepare for busy periods in advance

So, whether you’re ready to apply for a business loan or just would like some more information, head to Esme Loans eligibility checker to find out more now.

Business finance for SMEs


There are a range of business finance solutions available for SMEs. Here at Esme, we offer online business loans which are designed for busy SMEs looking for quick business finance with competitive rates. Our business loans range from £10,000 to £250,000* and can be repaid over a 1 to 5 year time period. Meaning you can choose a loan repayment plan that works for your business and its cash flow.

Before you apply for a loan with us, it’s important to ensure you meet the eligibility requirements below to increase your chances of approval.

  • Over 18 years old and a UK resident
  • Turnover of more than £50,000 per annum
  • You must be a sole trader or Director of a UK Limited company
  • Been actively trading for more than 3 years

How could Esme help?

If you’re looking to kickstart your growth now, Esme Loans could give you a helping hand with unsecured business loans, available from £10,000* to £250,000. Check your eligibility and apply now.

*From £25,500 for Sole Traders