Can I combine asset finance with an invoice finance facility or a working capital loan?

Short answer: Yes — many UK SMEs successfully combine these facilities to balance cash flow and growth

Yes, you can often use asset finance alongside an invoice finance facility or a working capital loan, provided the lenders agree on security and repayment priorities. This type of “multi-facility” structure is common in established UK businesses that need both equipment and dependable cash flow. The key is aligning lenders, security, and covenants so facilities work together rather than compete.

When planned well, combining finance can smooth cash flow, fund equipment and vehicles, and reduce pressure on your overdraft. It can also spread risk across different funding lines, so one facility is not doing all the heavy lifting. Best Business Loans helps you explore options and connect with providers who understand multi-facility arrangements.

We do not lend directly, but we introduce you to FCA-authorised lenders and brokers where required. You stay in control, and there’s no obligation to proceed after you receive options.

Why combine finance types?

• Asset finance funds the kit you need without large upfront spend.
• Invoice finance unlocks cash tied up in unpaid invoices to smooth working capital.
• Working capital loans help with tax, stock, payroll, and growth initiatives.

Together, they can support day-to-day trading and long-term investment. This balance can be especially helpful in sectors with long payment terms or seasonal peaks.

What will lenders look for?

• Clear security positions and no conflicts between charges.
• Evidence that cash flow covers combined repayments.
• Clean debtor book quality if invoice finance is included.

Expect lenders to ask for recent management accounts, aged debtor and creditor reports, bank statements, and details of existing charges. Planning this proactively helps speed up decisions in principle.

How the products fit together in practice

What is asset finance?

Asset finance helps you acquire or refinance equipment, machinery, vehicles, or technology. Repayments are spread over a fixed term, and the asset often provides the security. Typical structures include hire purchase, finance lease, and operating lease.

Because title is retained or the asset is specifically charged, asset finance can often sit alongside other facilities. This ring-fencing reduces overlap with lenders who hold floating charges.

What is an invoice finance facility?

Invoice finance advances a percentage of your unpaid B2B invoices to improve cash flow. Two common options are invoice discounting (you collect) and factoring (the lender collects and may manage credit control). Advance rates can range from around 70% to 90% of eligible invoices.

Many invoice finance providers take a debenture or a first-ranking charge over book debts. If another lender already holds a debenture, an intercreditor agreement is usually needed to define who gets paid first.

What is a working capital loan?

A working capital loan is a term loan or revolving facility used to cover general business needs. It may be unsecured, or it may require a personal guarantee or a debenture. Tenors typically range from 6 to 60 months, depending on provider and risk.

These loans can complement invoice finance by funding non-debtor needs like VAT, stock, marketing, or hiring. Some lenders will accept a second-charge position if the invoice financier holds a first-charge over receivables.

Factoring vs invoice discounting

• Factoring: lender manages collections; useful if you want outsourced credit control.
• Invoice discounting: you manage collections; more confidential and suits mature finance teams.

Either can sit alongside asset finance if security is coordinated. Some firms start with factoring, then switch to discounting as processes mature.

How lenders typically align security

• Asset finance: specific asset charge or title retention.
• Invoice finance: assignment of receivables and often a first-ranking charge over book debts.
• Working capital loan: unsecured with PG, or a debenture, sometimes second-ranking.

Alignment is handled by intercreditor agreements and charge registrations at Companies House. Good structuring prevents “double claims” over the same collateral.

Steps to combine facilities safely and efficiently

1) Map your funding needs and timing

Clarify what you need to finance and when cash is required. Split one-off investments (assets) from ongoing working capital. This determines the right blend of asset finance, invoice finance, and term lending.

2) Review your existing security

Check your current lender agreements and search the Companies House register for active charges. Identify if a lender holds an all-assets debenture. This helps you understand if waivers or consents will be needed for new funding.

3) Choose providers experienced in multi-facility deals

Some lenders are more flexible about intercreditor arrangements than others. Ask upfront if they will work alongside an invoice financier or accept a second-charge position. This avoids wasted applications.

4) Align covenants and payment schedules

Ensure combined repayments fit your realistic cash flow, including seasonal dips. Align facility reviews, information requirements, and financial covenants. Avoid conflicting obligations that could trigger technical breaches.

5) Prepare documentation early

• 12–24 months management accounts, latest statutory accounts.
• 3–6 months bank statements.
• Aged debtors and creditors, plus top customer concentrations.
• Asset list, quotes, and serial numbers for asset finance.
• Cash flow forecast showing serviceability and headroom.

Clean, accurate data supports faster underwriting. It can also improve pricing and advance rates.

6) Put intercreditor and account controls in place

Lenders may require a trust account or blocked account for invoice proceeds. Intercreditor documents define who gets repaid first if there is a default. Get legal advice to understand obligations and costs.

7) Monitor performance monthly

Track debtor days, dilutions, and facility utilisation. Watch any covenants such as gearing, DSCR, or minimum net worth. Share timely information with your lenders to maintain confidence and flexibility.

Costs, risks, and common pitfalls to avoid

Understand the full cost stack

• Asset finance: interest, documentation fees, option-to-purchase, termination fees.
• Invoice finance: service fee, discount margin, minimum fees, audit fees, trust account costs.
• Working capital loan: interest, arrangement fees, early settlement costs.

Combining facilities can be cost-effective if each product funds the right need. Avoid using short-term loans for long-term assets where possible.

Avoid security conflicts

Overlapping charges cause delays and can derail approvals. Agree who holds first ranking on receivables and who holds title over assets. Make sure new lenders acknowledge existing arrangements before drawdown.

Protect cash flow and covenant headroom

Do not overextend by stacking repayments too tightly. Stress-test scenarios such as slower payments, higher costs, or lost customers. Build buffers to absorb shocks without breaching covenants.

Quick example: logistics firm combining facilities

A transport company finances tractors and trailers via hire purchase. It uses invoice discounting to accelerate cash against 60-day debtor terms. The structure frees working capital for fuel, wages, and maintenance, while spreading vehicle costs over time.

This approach is common across haulage, courier, and pallet networks. If you operate in transport, explore our guide to sector funding at logistics business loans. Providers in this space are familiar with intercreditor arrangements and seasonal cash flow patterns.

When a working capital loan fits in best

A term loan can cover tax, stock, or marketing spend that invoice finance will not fund. It can also support growth while you build debtor volumes for an invoice line. Some lenders will use the UK Government Growth Guarantee Scheme for eligible cases.

How Best Business Loans helps you set this up the smart way

We help you explore the right blend of facilities for your business, then connect you with lenders or brokers who can support combined structures. Our AI-driven matching highlights providers comfortable with intercreditor agreements and sector nuances. You save time and avoid applying to lenders who cannot work alongside others.

Get a free Quick Quote to check indicative eligibility and potential routes. There is no obligation to proceed, and you decide which option suits your goals and cash flow. We act as an independent introducer and do not offer loans directly.

FAQs about combining asset finance, invoice finance, and working capital loans

Can I have asset finance and invoice finance at the same time? Yes, provided the lenders agree on security and there are no conflicts. This is common in asset-intensive, B2B sectors.

Will a working capital loan conflict with invoice finance? It depends on security. Many term lenders accept a second charge or rely on personal guarantees, but this must be agreed.

Do I need an intercreditor agreement? Often yes, if two lenders have interests that could overlap. It sets payout priorities and reduces legal risk for all parties.

What documents will I need? Expect management accounts, bank statements, aged debtor and creditor reports, asset details, and cash flow forecasts. Strong debtor quality improves advance rates.

Can start-ups combine facilities? Most providers we introduce are focused on established companies. If you have limited history, your options will be more restricted.

Key takeaways

• Combining asset finance with invoice finance or a working capital loan is achievable and common.
• The best outcomes come from clear security, aligned covenants, and realistic cash flow planning.
• Work with providers who regularly put intercreditor agreements in place.
• Use each product for what it funds best to optimise cost and flexibility.
• Get a Quick Quote to see matched providers and next steps without obligation.

Next steps: check eligibility and get matched

Share a few details about your business and funding goals, and we will introduce you to suitable lenders or brokers. You can request an indicative Decision in Principle or eligibility check without impacting operations. It is fast, secure, and free to submit your enquiry.

Best Business Loans does not guarantee approval or the lowest rate. We aim to connect you with providers likely to help based on your profile and sector.

Important information and compliance

Information on this page is for guidance only and is not financial advice. Finance is subject to status, affordability, and terms set by the provider. Security and personal guarantees may be required.

Fees, charges, and early settlement costs can apply. Eligibility rules vary by lender and may change without notice.

Where regulation applies, introductions are made to FCA-authorised firms. Please ensure any decision is based on full documentation and, if needed, independent advice.

Updated: October 2025