Consider a London food wholesaler that has been offered a supply agreement with a group of cafés. The new customer could bring months of additional sales, but the first deliveries are due before payment arrives. Ingredients, packaging and extra delivery shifts all need funding beforehand. The business can afford its usual orders, yet accepting this contract would leave little cash for anything else.
The contract may increase turnover, but the timing of those payments matters. The owner needs to check whether existing commitments and the extra work can both be funded until the first customer payment arrives.
A New Contract Can Demand Cash Before It Pays
Winning a contract does not necessarily improve a company’s immediate cash position. A wholesaler may need to purchase stock, arrange transport and cover employees’ wages before sending its first invoice. Even if the customer pays within the agreed terms, the business could face several weeks of spending without receiving anything from the new account.
Customer deposits or staged payments can reduce that pressure. Suppliers may also agree to split an order or extend payment terms. But those arrangements depend on what the other parties are willing to accept, and a contract with a short delivery deadline may leave little room for negotiation.
Where those arrangements cannot cover the upfront costs, working capital finance may give an established business another way to fund the work before its customer pays. Capify offers business loans to UK companies seeking funding for materials, stock, operating expenses and expansion. Its published lending range is £10,000 to £3 million, with the amount available depending on the assessment of each application.
Without enough cash to cover the upfront costs, the company could be forced to turn down an order it otherwise has the people and experience to fulfil.
More Sales Can Mean More Bills Arriving Together
As orders grow, the wholesaler may need to buy more stock, arrange additional deliveries and pay extra staff before its customers settle their invoices. Yet customer payments may still arrive on the same 30-day terms as they did when the company was smaller.
Delayed payments can make matters worse. The government’s 2025 Longitudinal Small Business Survey found that 63% of SME employers offering trade credit considered late customer payments a problem.
For the London wholesaler, a customer paying late could affect its ability to restock for the following week. The company may have a healthy order book, but the money needed for those orders remains tied up in goods already delivered.
Not every shortage requires borrowing. A customer deposit, a smaller initial delivery or a revised supplier payment date may reduce the amount of outside funding required. What matters is whether those changes are possible before the business has to commit to the next purchase.
A firm that cannot accept repeat orders at short notice may struggle to retain a customer who depends on regular deliveries.
The Expense Determines Which Funding Route Fits
A business waiting for payment on completed work faces a different problem from one that needs cash before production or delivery begins.
Invoice finance can provide funds against eligible unpaid business invoices. Some arrangements allow the company to continue collecting customer payments, while others involve the finance provider handling collection. The business needs outstanding invoices that meet the provider’s requirements, so this is less useful when the money is needed before an invoice can be issued.
A confirmed supplier purchase presents another possibility. Supplier invoice payment support allows a finance provider to pay a supplier directly, while the business repays the amount over an agreed period. Capify offers a separate supplier invoice payment product, with daily or weekly repayments over an agreed term.
That approach deals with a particular supplier bill. It does not necessarily meet the other costs involved in a new contract, especially when additional employees, transport and ongoing expenses also need funding.
A business loan offers a broader use of the borrowed funds, subject to its agreement. This may be relevant when a company needs to cover several expenses to fulfil an order or prepare for the next stage of growth.
Opening Another Site Creates Costs Before the First Sale
The pressure is not limited to wholesalers or companies waiting for invoices. A London hospitality business preparing to open another location may face a similar problem, even if its existing premises trade successfully.
A lease deposit, refurbishment work, kitchen equipment and recruitment costs can arise well before the new site receives its first customer. Business.gov.uk also identifies business rates and utilities among the ongoing costs of commercial premises.
Those initial payments are only part of the commitment. The company may have to operate two premises while the newer one builds a customer base. Rent, wages and supplier orders continue at both locations, whether or not the additional revenue meets expectations.
For an established company considering a larger funding facility, the question is not simply whether it can cover the opening costs. It is whether its existing operation can continue meeting commitments while the second location begins trading.
A business that has an opportunity to secure suitable premises may not be able to wait until enough cash has accumulated from current sales. Equally, borrowing does not guarantee that the new site will perform as planned. Both possibilities belong in the financial assessment.
Repayments Need to Match the Way Money Comes In
For companies considering working capital loans, the repayment schedule deserves as much attention as the funding amount.
Capify’s unsecured business loans generally involve daily or weekly repayments, with terms ranging from 3 to 24 months. This arrangement may be manageable for a retailer or hospitality company receiving regular income. It can be more demanding for a business that completes projects over several weeks and receives a single payment afterwards.
A company could borrow enough to purchase stock and then find that repayments begin before the customer settles its invoice. That possibility needs to be reflected in the cash flow forecast, alongside existing borrowing, wages and supplier commitments.
The total repayment amount also matters. Fees, borrowing costs and the repayment period affect how much money remains available for other business expenses. Capify requires a personal guarantee on its business loans, meaning a guarantor may become personally liable if the company fails to meet its obligations.
Lenders also assess whether the business is established enough to support the borrowing. Capify’s general criteria include at least 12 months of trading and monthly turnover of £10,000 or more. Higher funding amounts are typically aimed at mature companies with an established trading record, and eligibility does not guarantee approval.
Recent bank statements, contract details and evidence of trading performance help explain why the funds are needed and how the company expects to meet repayments. A signed order may support the business case, but expected revenue must still be considered alongside the dates and costs of delivering it.
Check the Costs Before Committing to Growth
Before accepting the café contract, the wholesaler needs to know whether it can fund the first deliveries while continuing to serve existing customers. A hospitality business opening another site faces a different calculation, with two sets of bills to cover while the new premises begin trading.
Before committing, the owner needs to compare the payments due over the coming weeks with the income expected during that period, while keeping enough cash available for existing operations. If the figures reveal a shortfall, changing customer or supplier payment terms may reduce the need for borrowing.
Where outside finance is still needed, the amount borrowed should reflect the cash shortfall, while the repayment schedule needs to be assessed against realistic income and expenditure forecasts.
