Commercial Finance Options Your Clients Probably Do Not Know Exist
From revenue-based finance to vendor finance and revolving credit facilities: a guide for accountants on the commercial lending products their clients rarely ask about.
Most business owners know about business loans and overdrafts
Some know about invoice finance. Fewer are aware of the range of specialist products that might be a better fit for their situation than either. As an adviser, being familiar with what is available, even if you cannot arrange it yourself, positions you as someone who thinks broadly about their clients' commercial interests.
Revenue-based finance
Revenue-based finance provides a lump sum which is repaid as a percentage of monthly revenue. There is no fixed repayment schedule. The cost rises and falls in line with the business's turnover. When linked specifically to card takings, this is often referred to as a merchant cash advance.
The appeal for certain businesses is genuine. Seasonal hospitality and retail businesses, gyms, and leisure operators can find that a repayment structure that flexes with their revenue is significantly less stressful than a fixed monthly loan commitment. During a slow period, the repayments reduce automatically. A fixed loan does not care about your client's January.
For many businesses, the first step is simply knowing these options exist. Clients cannot ask about a product they have never heard of. Being the adviser who expands their awareness of what is available, even in broad terms, adds real value to the relationship and positions you as someone who thinks about their business holistically.
Revolving credit facilities
A revolving credit facility functions like a business credit card with a larger limit and typically lower cost. The client draws down what they need, repays it, and the limit resets. There is no need to reapply each time they need to use it.
It is an effective tool for businesses that have predictable but recurring working capital needs: bridging the gap between supplier payment terms and customer receipts, funding short-term stock purchases, or managing seasonal cash flow fluctuations. Because the client only pays for what they draw down, it is more cost-efficient than a term loan for purposes where the full amount is not needed continuously.
Vendor finance and deferred payment structures
Where a client is making a significant capital purchase, it is worth knowing that in some cases the structure of the deal can be built around the income the asset will generate, rather than the client's existing balance sheet.
This is particularly relevant in sectors like leisure, fitness, and hospitality. A padel court complex, a gym fit-out, or a catering operation can in the right circumstances be financed partly through vendor arrangements or specialist facilities that tie repayment to the projected revenue of the new operation. Not every deal qualifies, but for larger capital expenditures it is worth exploring before assuming a standard loan is the only option.
Refinancing existing debt
Clients who took on high-cost finance in the past, particularly those who used merchant cash advances or short-term facilities during periods of tighter credit, may now be able to refinance at substantially lower rates. This is a conversation that is easy to overlook because the client is not actively seeking new finance. But if they are carrying a facility at a high factor rate when a term loan at lower cost is now available, the saving over the remaining term can be material.
As the accountant reviewing their financial position, you are well placed to spot this. Flagging it proactively, rather than waiting for the client to raise it, is exactly the kind of commercial awareness that justifies a strong advisory relationship.
The conversation is also easier than it might seem. You do not need to have identified a specific lender or product to raise it. Simply asking whether they have reviewed the cost of their current facilities recently, or mentioning that refinancing options have improved in the current rate environment, is often enough to open the discussion and signal that you are watching their financial position actively.
Personal guarantee insurance
For clients who have signed personal guarantees on business debt, PG insurance is available that covers a percentage of the guarantee, typically between 60% and 80%, in the event of company failure. The annual premium is based on the amount guaranteed and the risk profile of the business.
It is not widely known outside of specialist circles and is rarely proactively offered by lenders. For clients with significant personal assets and material guarantee exposure, it is a conversation worth having. The premium is generally modest relative to the protection it provides, and it can make a significant difference to a director's personal risk position.
Asset refinance
If a client owns equipment, vehicles, or plant outright, or has equity in financed assets, it may be possible to raise capital against those assets without disposing of them. Asset refinance releases the value tied up in existing equipment while the business continues to use it.
This is often overlooked as a source of working capital, particularly by businesses that have been building up asset value over time. A broker can quickly assess whether the assets are suitable and what level of finance could be raised against them.
For clients in asset-intensive sectors like manufacturing, haulage, or construction, the cumulative value tied up in owned equipment can be substantial. A broker can run a quick assessment of what that asset base might support in terms of refinancing, which gives both you and the client a clearer picture of what capital is actually available to the business beyond what appears in the bank account.
Staying current on what is available
The commercial lending market changes faster than most people realise. Lenders that were cautious 18 months ago are actively writing new business today. Products that were not available to smaller SMEs a few years ago are now accessible through specialist intermediaries. Rates have shifted significantly as the Bank of England base rate has moved.
A brief annual conversation with a broker keeps you current without requiring you to become an expert yourself. Knowing that revolving credit facilities are now available to businesses at an earlier stage, or that there is a new lender actively targeting your clients' sector, is the kind of market intelligence that makes a material difference to the advice you can give.
LoanLogic is happy to do a short briefing call with accountants who want to understand the current commercial lending landscape in more depth. No obligation, no pitch. Email ben@loanlogic.co.uk to arrange a time.
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