Can I fund staff training, marketing, or IT upgrades as working capital?
The short answer, and what “working capital” covers
Yes — many UK business finance products allow you to use funds for staff training, marketing campaigns, and IT upgrades as working capital. Lenders typically class these as day-to-day operational or growth expenditures, provided they are for genuine business purposes. The key is choosing a facility that explicitly permits general working capital use, and matching it to your cash flow.
Working capital finance is designed to help businesses pay for their ongoing costs and near-term investments. That includes salaries, training programmes, advertising, digital marketing, software licences, and technology improvements. It’s common across sectors — from manufacturing and logistics to hospitality, healthcare, and professional services.
There are limits and caveats to be aware of. Some lenders exclude certain uses like property purchases, long-term tax arrears, or personal spending. Others want a clear commercial rationale for the spend, such as improving productivity, reducing costs, or driving revenue.
What lenders mean by working capital
“Working capital” usually means short-term cash needed to run and grow your business. It bridges timing gaps between outgoings and incoming revenue. It can also cover planned spending that delivers near- to mid-term returns.
Training helps upskill teams, improve compliance, and boost productivity. Marketing drives sales pipeline and brand awareness. IT upgrades enhance reliability, security, and efficiency.
Used well, these investments support profitability and resilience. Lenders generally view them as valid business purposes, especially where there’s a measured plan and projected return.
Typical permitted uses
- Staff development, accreditations, and compliance training
- Marketing campaigns, SEO, PPC, social media, and new product launches
- IT hardware, software licences, cybersecurity tools, and cloud migrations
- Website rebuilds, eCommerce upgrades, CRM/ERP implementations, and automation
- Supplier deposits, stock purchases, and general cashflow smoothing
Always check your lender’s use-of-funds policy before applying. If in doubt, ask for written confirmation that your intended use is allowed.
Finance options that can cover training, marketing, and IT
Several mainstream business finance options in the UK allow broad working capital use. The right fit depends on how quickly you need funds, how long you need them for, and your affordability profile.
Unsecured term loans
Unsecured term loans can fund a defined project such as a six-month marketing push or a structured staff training plan. They offer fixed terms and predictable repayments, which makes budgeting easier. Some lenders require director guarantees; rates and limits vary by sector, trading history, and credit profile.
Revolving credit facilities and overdraft alternatives
Revolving credit lines let you draw, repay, and re-draw within a set limit. They are useful for rolling marketing activity, staged IT rollouts, or pay-as-you-learn training. You typically pay interest only on what you use, helping maintain flexibility.
Invoice finance (factoring or discounting)
Invoice finance releases cash tied up in unpaid invoices. It’s popular for funding working capital needs across B2B firms on credit terms. Funds can be used toward training, marketing, or IT as part of broader cashflow management.
Merchant cash advance (card takings)
For card-reliant businesses, a merchant cash advance provides a lump sum repaid via a percentage of future card sales. It flexes with revenue, which can suit seasonal marketing or training plans. Costs are agreed upfront via a single fee; suitability depends on consistent card turnover.
Asset finance and technology funding
Asset finance can fund IT hardware such as servers, POS systems, laptops, and specialist devices. Software and training are sometimes bundled through unsecured facilities rather than classic asset finance. Speak to a provider about the split of hardware versus services in your project scope.
Business credit cards and short-term lines
Cards can cover smaller training courses, subscriptions, or ad spend, but interest can be high if balances roll. Short-term lines may suit tactical needs, provided you have a clear repayment strategy. If your use is recurring and sizeable, an unsecured loan or revolving facility is usually more cost-effective.
Government-backed options
The British Business Bank’s Growth Guarantee Scheme (GGS) supports lending to eligible UK businesses through participating lenders. Funds can be used for working capital and investment, subject to scheme rules. Approval remains the lender’s decision; guarantees do not remove your obligation to repay.
Grant programmes may exist for sector-led training or digital adoption. These are limited and competitive, so a blended approach with commercial finance is common.
Costs, eligibility, documents, and timelines
Costs depend on facility type, risk, and market conditions. Unsecured term loans and revolving credit facilities typically carry higher rates than secured lending, because there’s no tangible asset to recover. Invoice finance pricing depends on turnover, debtor quality, and concentration.
What it may cost (without quoting rates)
- Unsecured term loans: fixed repayments; fees may include arrangement charges and early settlement terms
- Revolving credit: interest on drawn amounts, plus facility fees
- Invoice finance: service fee plus discount rate on funds advanced
- Merchant cash advance: a pre-agreed fee collected from future card sales
- Asset finance: fixed rentals; VAT and ownership vary by structure
Always review the total cost of finance against the expected uplift from training, marketing, or IT investment. Build a simple ROI model and a fallback plan if returns are slower than forecast.
Eligibility snapshot
Most providers prefer established limited companies or LLPs with trading history and filed accounts. Lenders may consider revenue, profitability, cashflow, existing commitments, and director credit. For invoice finance, the quality of your debtor book and payment terms matters.
Providers often look for evidence that the use-of-funds will benefit the business. A clear plan for training outcomes, campaign goals, or IT efficiency can strengthen your application. Being transparent about risks and mitigations builds credibility.
What to prepare
- Latest filed accounts and up-to-date management information
- Business bank statements (typically 3–12 months)
- Summary of the project: training syllabus, marketing plan, or IT scope with vendor quotes
- Cashflow forecast showing affordability, including seasonality
- Details of existing finance commitments and any security positions
Time to funding can range from 24–72 hours for simpler unsecured products to several weeks for structured facilities. Early preparation of documents speeds up decisions. Be ready to respond quickly to lender queries.
Compliance and fairness note
Any funding you accept will be subject to status, affordability checks, and the provider’s terms. Advertised features are not a guarantee of approval or cost. Always read the full offer documents and seek professional advice where appropriate.
Practical examples, sector notes, and pitfalls to avoid
Consider these real-world scenarios to gauge suitability. A manufacturer funds ISO and safety training via a term loan, improving compliance and operational efficiency. A retailer uses a revolving credit facility to smooth monthly ad spend while monitoring ROAS and cash conversion.
A care provider invests in secure devices and a cloud care-management platform via asset finance plus an unsecured top-up. An accountancy practice funds structured marketing and CPD over 12 months, aligning repayments with expected client pipeline. A hospitality operator balances seasonal demand by funding training and digital bookings upgrades ahead of peak.
If you operate in hospitality and accommodation, see our guidance on sector-specific funding routes and seasonal cashflow. You can explore more on our page about funding for hotels and hospitality here: hotel and hospitality business loans. Sector nuances can affect lender appetite, documentation, and facility structure.
Common pitfalls to avoid
- Using short-term finance for long-term, non-revenue assets without a repayment plan
- Underestimating training time-to-impact or marketing ramp-up periods
- Launching IT changes without contingency budget for integration or security
- Mixing personal and business use-of-funds, which providers prohibit
- Ignoring total cost of finance and impact on future cash buffers
Track outcomes against the business case. For training, measure productivity, quality, or compliance gains. For marketing, monitor CAC, ROAS, and payback period.
For IT upgrades, quantify downtime reductions, licensing savings, or security risk mitigation. Where projects are phased, consider a revolving facility or staged drawdowns. This can reduce interest costs while improving control and accountability.
Tax treatment matters as well. HMRC generally allows revenue expenditure like training and marketing as deductible expenses, and many IT assets may qualify for capital allowances. Always confirm with your accountant or refer to HMRC guidance for your specific case.
How Best Business Loans helps, FAQs, and next steps
BestBusinessLoans.ai helps UK companies identify which funding types are most suitable for general working capital, including staff training, marketing, or IT. We do not provide loans directly; we introduce you to lenders and brokers who may be able to help. Our AI-driven matching saves you time and connects you with providers active in your sector.
How our AI matching works
- Complete a Quick Quote with your funding goal and business profile.
- Our system analyses your sector, trading history, and project use-of-funds.
- We introduce you to relevant lenders or brokers for working capital solutions.
- You choose whether to proceed after reviewing terms and suitability.
It’s free to submit an enquiry and you’re under no obligation to accept any offer. We’re transparent that the “best” option depends on your business, not just rate alone. Reliability, speed, covenants, and flexibility can be equally important.
FAQs: funding training, marketing, and IT as working capital
Can I use an unsecured loan for staff training? Yes, many unsecured term loans permit training as an eligible working capital purpose. Lenders may ask for a plan and forecasted benefits.
Are marketing costs allowed? Most general working capital facilities allow marketing and advertising spend. Keep a clear budget and ROI tracking to support your application.
Can I finance IT upgrades without security? Yes, via unsecured loans or revolving credit, though asset finance may be cheaper for hardware. Software and services are often handled via unsecured facilities.
How quickly can I get funds? Simple unsecured products can fund within days. More structured facilities and larger amounts can take longer due to underwriting and due diligence.
Will I need a personal guarantee? Some lenders request director guarantees for unsecured borrowing. It depends on the facility, amount, and your company’s profile.
What about government-backed options? The Growth Guarantee Scheme supports participating lenders to offer facilities for working capital and investment. Eligibility, terms, and approvals remain with the lender.
Key takeaways
- Yes — training, marketing, and IT upgrades are commonly eligible as working capital.
- Choose a facility that matches your project’s cash profile and payback window.
- Prepare a simple business case, cashflow forecast, and supporting documents.
- Check permitted uses and terms carefully before drawing funds.
- Compare beyond headline rates — flexibility and speed can be decisive.
Important: This article is for information only and is not financial advice. Finance is subject to status, terms, and affordability checks; eligibility and costs vary by provider and product.
About Best Business Loans
Best Business Loans is an independent introducer helping established UK businesses explore commercial finance through AI-driven matching and a professional network. We don’t provide loans directly or offer advice; we connect you with suitable finance providers. We may receive an introducer fee from partners if you proceed.
Get started: Submit your free Quick Quote to check your eligibility and options for working capital funding. It takes minutes and there’s no obligation. Visit BestBusinessLoans.ai to begin.
Updated October 2025. External references: British Business Bank — Growth Guarantee Scheme; HMRC — capital allowances and allowable expenses. Check the latest official guidance before making decisions.