Over the last 18 months, many businesses have turned to short-term lending solutions to navigate rising costs, inflationary pressures and economic uncertainty.

While these facilities have provided valuable flexibility, we’re increasingly seeing businesses reach a point where multiple short-term loans, higher interest costs and increasing repayment commitments are beginning to restrict cashflow and future growth plans.

As a result, many business owners are now reassessing their funding structures.

The Shift Towards Longer-Term Funding

Rather than relying solely on short-term borrowing, businesses are looking to create more sustainable funding arrangements that align with their long-term objectives.

This often involves:

• Consolidating multiple facilities into a single structure
• Extending repayment terms to improve cashflow
• Combining working capital facilities with growth funding
• Creating additional headroom for future investment

The objective is not simply to reduce monthly repayments but to create a funding strategy that supports stability and growth.

Invoice Discounting Remains Popular

One of the strongest trends we’re seeing is the continued demand for invoice discounting.

For businesses with strong debtor books, invoice finance can unlock working capital tied up in unpaid invoices, providing immediate liquidity without waiting for customers to pay.

When combined with term lending, it can create a balanced funding solution that supports both day-to-day operations and longer-term investment plans.

Interest Rates and Market Conditions

The Bank of England held the base rate at 3.75% during its latest meeting, although inflationary pressures continue to create uncertainty around the timing and extent of future rate reductions.

Despite this, long-term funding costs have eased slightly during May, presenting opportunities for businesses considering refinancing or restructuring existing facilities.

Is It Time to Review Your Funding?

A funding structure that worked 12 months ago may no longer be the most effective solution today.

Whether you’re looking to improve cashflow, consolidate existing borrowing or secure funding for growth, taking a proactive approach can often create greater flexibility and stronger financial foundations for the future.

At Pilot Fish, our team combines over 50 years of experience across commercial finance, property finance and M&A advisory, helping businesses secure funding solutions tailored to their objectives.