Choosing the right finance
How do I know which type of business finance is right for me?
By Sam Wells · 21 July 2026
Match the funding to how your business gets paid. If you invoice other businesses on terms, invoice finance usually fits. If customers pay by card, look at a merchant cash advance. If you need a fixed sum for a one-off, a business loan fits. A broker matches the product to your cash cycle rather than to whatever you have heard of.
The quickest way to narrow it down is to look at how money actually comes into your business, not at which product you have heard of.
| How your money comes in | The product that usually fits |
|---|---|
| You invoice other businesses on 30 to 90 day terms | Invoice finance |
| Customers pay by card at the till | Merchant cash advance |
| Cash is tied up in stock you have not sold yet | Trade or supply chain finance |
| Cash is tied up in equipment and machinery | Asset finance |
| You need a fixed sum for a specific purpose | Business loan |
The most common mistake we see is a business taking the product it has heard of rather than the one that matches how it gets paid. A pub with card takings does not need invoice finance. A recruitment agency waiting 60 days to get paid rarely needs a merchant cash advance.
Across the deals we arrange, invoice finance and business loans are the two most common products, at roughly 45% and 39% of what we place. Everything else fits a more specific cash cycle. The point of talking to a broker is that we look at your whole picture, including who owes you money and how quickly they pay, and match you to the lender most likely to say yes on sensible terms.
If you are not sure which one fits, that is the conversation to have before you apply anywhere.
Written by
Sam Wells
Director, FundingLinks
Co-founder and Director at FundingLinks with over 15 years of leadership experience in commercial finance. He works directly with SMEs across the UK to structure funding across the whole lender market.
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