Two of the most common ways UK limited companies and LLPs fund growth are invoice finance and a term business loan. This guide explains how each works, where they differ, and how to decide — from Credicorp, an exempt business lender serving incorporated businesses only.
If your growth is held back by the gap between raising an invoice and being paid, invoice finance releases cash tied up in your sales ledger. If you need a lump sum for a defined purpose — new equipment, a hire, an expansion — repaid over a set term, a business loan is usually the better fit. Many growing companies use both at different stages.
Invoice finance advances a percentage of the value of your unpaid B2B invoices — typically up to 80–90% — within a day or two of you raising them. When your customer pays, you receive the balance, less the finance charge. It is a revolving facility: as you invoice more, more funding becomes available, so it scales with your turnover.
A term loan gives you a single, agreed lump sum up front, repaid in scheduled instalments over a fixed period. The amount, rate and term are set at the outset, so your repayments are predictable and easy to budget around — useful when you are financing a specific, one-off investment.
| Consideration | Invoice finance | Term business loan |
|---|---|---|
| What you receive | Advance against unpaid invoices | A one-off lump sum |
| How it scales | Grows as your sales ledger grows | Fixed amount agreed up front |
| Repayment | Settled as your customers pay | Scheduled instalments over a set term |
| Typical use | Bridging the invoice-to-payment gap | A defined capital investment |
| Requirement | B2B invoices on credit terms | Ability to service fixed repayments |
Credicorp lends exclusively to UK limited companies and LLPs registered at Companies House. Our lending is commercial, provided to incorporated businesses and falls outside FCA consumer-credit regulation under the exemptions in the FSMA (Regulated Activities) Order 2001 — including the large-company exemption (Article 60B) and the high-net-worth exemption (Article 60L). Because we assess your company directly rather than an individual consumer, decisions are faster; note that the consumer-credit protections that apply to personal borrowing do not apply to this commercial lending.
The right choice depends on your sales model, how quickly you are paid, and what you are funding. If you are financing a defined investment, a term loan is usually simplest; if the pinch is the wait to be paid, releasing cash from your ledger tends to work better. Our team can talk through which structure fits your company before you apply.
