The Four Main Types of Business Finance
Business Loan
Borrow a lump sum and repay in fixed monthly instalmentsA business loan gives you a fixed amount of capital upfront which you repay over an agreed term, usually between three months and five years. Repayments are fixed, so you know exactly what you owe each month. Funds can be used for almost any business purpose including growth, equipment, stock, or working capital.
Alternative lenders can approve and fund in as little as 24 hours, making this a strong option for businesses that need a defined sum quickly without the delays of a high street bank.
Learn more about business loans at Caply →Merchant Cash Advance
Borrow against your future card sales with flexible repaymentsA merchant cash advance advances you a lump sum which is repaid as a percentage of your daily card transactions. In a strong month you repay more. In a quieter month you repay less. There are no fixed due dates and no penalties for slower trading periods.
This product is exclusively for businesses that take card payments and works particularly well for hospitality, retail, and service businesses where revenue can fluctuate week to week.
Learn more about merchant cash advances at Caply →Invoice Finance
Unlock the cash tied up in your unpaid invoices immediatelyInvoice finance lets you access up to 90% of the value of an unpaid invoice within 24 to 48 hours, rather than waiting 30, 60, or 90 days for your client to pay. When the client settles the invoice, you receive the remaining balance minus the lender's fee.
This is a cash flow solution rather than a traditional loan. You are not taking on new debt. You are simply accessing money that is already owed to you. It scales automatically as your sales ledger grows.
Learn more about invoice finance at Caply →Growth Guarantee Scheme
Government-backed lending for businesses that may not qualify through standard routesThe Growth Guarantee Scheme is a government-backed initiative that helps UK businesses access finance when they might struggle to qualify through standard lending criteria. The government provides lenders with a guarantee on a portion of the loan, which reduces the lender's risk and opens doors that standard products might not.
It is particularly useful for businesses with a limited trading history, those operating in higher-risk sectors, or those that have previously been declined by a high street bank.
Learn more about the Growth Guarantee Scheme at Caply →How They Compare at a Glance
| Feature | Business Loan | MCA | Invoice Finance | GGS |
|---|---|---|---|---|
| Repayment type | Fixed monthly | % of card sales | When client pays | Fixed monthly |
| Security needed | Sometimes | No | Invoices | Sometimes |
| Best suited to | Most businesses | Card payment businesses | B2B businesses | Harder to fund businesses |
| Speed to fund | 24 to 72 hours | 24 to 72 hours | 24 to 48 hours | A few days |
| Minimum trading | 6 months | 6 months | 6 months | Flexible |
Which Type Is Right for Your Business?
Use this quick reference guide to find the most likely fit based on your situation. A broker can then confirm the right product and match you to the most suitable lender.
Why It Pays to Use a Broker
Choosing the wrong finance product can be costly. A merchant cash advance used by a business with irregular card volumes, or a fixed term loan taken out by a business with unpredictable revenue, can cause serious cash flow problems further down the line.
A broker looks at your full picture before recommending anything. At Caply, we ask the right questions upfront, match you to the product that genuinely suits your business, and access a panel of lenders through a single soft search that does not affect your credit score.
We do not charge upfront fees and we are paid by the lender when a deal completes, so there is no incentive for us to recommend anything other than what is right for you.