Growth-stage businesses
Profitable trading companies funding expansion, new product lines, or geographic launch without diluting equity.
Cashflow loans
Cashflow loans: term funding sized on your trading performance.
Unsecured and lightly-secured term loans for growth, acquisitions, and restructure events.
What it is
What cashflow loans means at Bedrock.
Cashflow loans are term debt priced against the business's trading performance rather than its asset register. Underwriting turns on EBITDA, leverage multiple, debt-service coverage, and the quality of the management information that supports the projection.
These facilities are typically used to fund acquisitions, MBOs and MBIs, dividend recapitalisations, and growth events where the company has the earnings to service debt but not the asset base for ABL or commercial mortgages. Pricing reflects the absence of hard collateral.
We work with both clearing-bank cashflow desks and specialist debt funds. Bank cashflow tends to price tighter but covenants harder. Specialist funds price wider but offer more structuring flexibility. The right answer depends on what the borrower values more: the headline rate or the operating freedom.
Who it's for
Common deal profiles.
Three patterns we see most often. The first conversation finds out which one you're closest to.
MBO and MBI teams
Management buy-outs where the operating business generates the cashflow to service term debt alongside any vendor loan note.
Restructure and refinance events
Replacing a maturing facility, consolidating multiple debts, or releasing equity through a recap.
How we structure it
Facility shape and timeline.
- Loan sizes
- £500k to £20m+
- Typical terms
- 3-7 years, often amortising with a balloon payment
- Security
- Debenture, intercreditor with other lenders, personal guarantees considered case by case
- Timeline
- Indicative terms once we've sounded out the right funders. Drawdown 4-10 weeks depending on diligence depth.
Eligibility
What cashflow lenders look for.
Cashflow lending is underwritten on earnings, so the starting point is a profitable trading history, usually evidenced by several years of filed accounts, and EBITDA that is stable or growing. Lenders want to see that the business can service the new debt from operating cashflow with headroom to spare.
They also assess the quality of earnings (how recurring and diversified revenue is), the depth of the management team, the sector outlook and the purpose of the loan. A credible financial forecast showing how the debt is repaid is central to any application.
How it is sized
How a cashflow loan is sized.
Lenders size cashflow loans mainly on leverage, the ratio of total debt to EBITDA, and on debt-service cover, the ratio of available cashflow to the annual interest and capital repayments. Acceptable levels vary by lender, sector and how predictable the earnings are, so there is no standard multiple.
The loan is usually tested against financial covenants for its whole life. Typical covenants include maximum leverage, minimum interest or debt-service cover and sometimes a minimum cash balance. Negotiating covenants with enough headroom matters as much as the headline amount.
Where a cashflow loan sits alongside other debt, such as an invoice finance line or asset finance, the lenders agree an intercreditor arrangement that sets out who ranks first against which assets.
Costs
What a cashflow loan costs.
Costs usually comprise an interest margin over a reference rate, an arrangement fee and the lender's legal and due diligence costs. Some specialist debt funds also charge an exit fee or take warrants in return for more flexible terms. Clearing banks generally price tighter but set tighter covenants.
We compare offers on total cost and on terms, including covenants, amortisation, prepayment fees and security, rather than on the headline rate alone.
Sectors
Sectors where this product fits.
The sectors below are where this product fits most often. Each links to a fuller sector page.
FAQ
Common questions.
Straight answers on how cashflow loans works for UK limited companies.
Is a cashflow loan unsecured?
Usually not entirely. Most cashflow lenders take a debenture over the company, and personal guarantees are considered case by case. The difference from asset-backed lending is that the loan is sized on earnings rather than on the value of specific assets.
What can a cashflow loan be used for?
Common uses are acquisitions, management buy-outs and buy-ins, growth investment, refinancing existing debt and dividend recapitalisations. Lenders want a clear purpose and a forecast showing how the loan is repaid.
How is a cashflow loan different from an overdraft?
An overdraft is a short-term revolving facility that is usually repayable on demand. A cashflow loan is term debt, typically over three to seven years, with a set repayment profile and financial covenants, sized on the business's earnings.
What are financial covenants?
Covenants are tests the business must meet during the loan, such as a maximum ratio of debt to EBITDA or a minimum level of cashflow cover for repayments. A breach gives the lender rights to reprice or demand repayment, so headroom matters.
What size of cashflow loan does Bedrock arrange?
Cashflow loans Bedrock arranges typically range from around £500k to £20m or more, depending on the earnings of the business and each lender's appetite.
Guides
Guides for this product.
Sector analysis from Bedrock on how this product is structured and underwritten in practice.
Business ServicesWhy business-services firms get cashflow loans where they expected invoice finance
Asset-light service firms expect invoice finance to fund the gap between paying staff and getting paid. The ledger often won't support it. The reasons are specific, and so are the cases where invoice finance does work.
Financial ServicesDebt, equity, or both: structuring partner buy-ins and consolidator roll-ups
A partner buying into an IFA, a founder selling to a consolidator, and a serial acquirer funding a buy-and-build are three different problems. Each one resolves into a different split between debt, equity, and deferred consideration.
HealthcareFunding a second site: what lenders actually underwrite in healthcare acquisitions
Buying a second care home, dental practice or clinic is a regulatory transaction before it is a financial one. What specialist healthcare lenders read first, where deals stall, and how the structure follows the registration.
Professional ServicesCashflow loan or equity? The funding fork for consolidating advisory firms
Private equity now owns a fifth of the UK's larger accountancy firms and a swathe of listed law consolidators. An independent acquirer competing for the same targets has to decide what debt can fund and where equity has to start.
Need cashflow loans for your business?
Five minutes on a call gives us enough to come back with indicative options once we've sounded out the right funders.