What information should I include about the use of funds to improve matching?
Start with a clear, specific “use of funds” statement
To improve your chances of being matched with suitable UK lenders or brokers, clearly explain what the money will be used for, how much you need, and when you need it. The best “use of funds” statements are specific, evidence-based, and show how the finance will support your business goals and cash flow. Being precise helps our AI and our network of providers quickly identify the right product type and eligibility fit.
Include a simple breakdown of the costs, expected timeline, and the measurable outcomes you’re aiming for (for example, new revenue, cost savings, or operational resilience). Note any supplier quotes, contracts, or invoices available to support your figures. Lastly, explain how you plan to repay the finance from normal trading, a project milestone, or a defined cost-saving.
What to include at minimum
- Purpose: a plain-English description of what you’re funding.
- Amount: total required, plus cost breakdown by item or work package.
- Timing: when you need the funds and over what period they will be used.
- Outcome: the commercial benefit (revenue, margin, efficiency, compliance).
- Repayment source: how the finance will be serviced (cash flow, receivables, contract income).
Why this matters for eligibility
Lenders map purposes to product types and risk profiles. For example, equipment purchases often align with asset finance, while short-term working capital may suit a revolving facility or a cash flow loan. A detailed “use of funds” narrows options to providers actively lending in your sector and improves decision speed.
Quick action
Have your supplier quotes, costings, and target dates ready before you request a Quick Quote or Decision in Principle. This reduces back-and-forth and can accelerate introductions.
Structure your “use of funds” in 7 steps
Use the following steps to present a lender-ready summary. Keep it factual, concise, and consistent with your financials and forecasts.
1) State the purpose in one line
Example: “£180,000 to purchase and install a CNC machine to increase capacity for existing contracts.” This sentence should be unambiguous and commercial in tone. Avoid generalisations like “growth” or “expansion” without detail.
2) Provide a costed breakdown
- Item or activity (equipment, fit-out, vehicles, stock, marketing).
- Unit cost, VAT treatment, installation or onboarding fees.
- Total project budget and any contingency (5–10% if appropriate).
3) Add a timeline and dependencies
Explain when funds are needed, delivery and installation windows, and any critical dates. If phased, show drawdown stages and what unlocks each phase. Note supplier lead times or seasonal peaks.
4) Evidence the plan
- Attach or reference quotes, pro formas, or contracts.
- Point to key KPIs or pre-sold demand (orders, letters of intent).
- Reference any regulatory approvals or certifications required.
5) Explain the commercial outcome
Describe how the finance will increase revenue, protect margin, cut costs, or ensure compliance. Offer simple metrics: “+22% capacity”, “energy costs reduced by 15%”, or “2 extra tables per service after refit”.
6) State the repayment source and cash flow fit
Link repayments to existing cash flows, confirmed contracts, or savings. If variable, explain your seasonality or debtor cycles and any buffers. This helps providers assess affordability.
7) Note security, contribution, and other funding
Mention any deposit, equity input, grants, or other finance already in place. If assets are available as security, say so. Transparency here can expand your options and strengthen your position.
Template you can copy
Purpose: [What you’re funding]. Amount: £[total], Breakdown: [line items + VAT]. Timeline: [dates and phases]. Evidence: [quotes/contracts]. Outcome: [capacity/revenue/savings/compliance]. Repayment: [source and term fit]. Security/Contribution: [assets/deposit/other funding].
Documents and details that strengthen your match
Credible documents turn a good “use of funds” into a strong one. They also help our AI route your enquiry to providers whose underwriting approach fits your scenario.
Helpful evidence to include
- Supplier quotes, pro formas, or signed proposals.
- Installation schedules, delivery notes, or project plans.
- Customer orders, contracts, or framework agreements.
- 12–24 month cash flow forecasts, with assumptions and a short sensitivity analysis.
- Latest management accounts and aged debtor/creditor lists (if relevant).
- For vehicles/equipment: make/model, age, hours/mileage, serial numbers, and any warranties.
- For refits/fit-outs: scope of works, drawings, and contractor credentials.
Sector-specific notes to improve matching
- Manufacturing and engineering: link capex to throughput and confirmed orders.
- Construction and trades: reference project pipelines and stage payments.
- Transport and logistics: specify vehicle utilisation, maintenance plans, and contracts.
- Healthcare and care: mention CQC requirements and occupancy or contract stability.
- Hospitality and restaurants: tie refurbishment or kitchen upgrades to covers per service and upsell potential; see our sector overview for restaurant and hospitality funding.
Compliance and permissions
If the project needs licences, planning approvals, or certifications, say what’s secured and what’s pending. Lenders prefer clarity on regulatory dependencies and timing. Include any insurance relevant to the funded assets or works.
Pro tip
Where possible, show how the funded assets retain value. Resale value and asset condition can influence asset finance and refinance decisions.
How purpose affects product matching
Different finance types suit different uses of funds. By naming the purpose and providing detail, you help our system identify fit, pricing expectations, and likely documentation needs.
Common purposes and likely routes
- Equipment or machinery: asset finance, hire purchase, finance lease.
- Vehicles and fleet: vehicle finance, operating lease, hire purchase.
- Fit-out or refurbishment: fit-out finance, unsecured business loan, asset-backed options.
- Short-term working capital: revolving credit facility, business loan, merchant cash advance.
- Stock purchasing: trade finance, revolving credit, short-term loan.
- Debtor funding: invoice finance, invoice discounting, selective invoice finance.
- Energy efficiency or sustainability upgrades: sustainability-linked finance or asset finance.
- Refinancing existing agreements: consolidation or refinance to improve cash flow.
Purpose-driven information lenders look for
- For asset finance: asset details, supplier, invoice, useful life, and maintenance.
- For invoice finance: debtor mix, payment terms, dispute rates, and concentration risk.
- For merchant cash advance: average monthly card takings, seasonality, and terminal provider.
- For working capital: cash flow profile, triggers, contingency, and repayment plan.
- For stock/trade finance: purchase orders, supplier terms, and logistics timelines.
Timing and drawdown shape the match
If funds are needed in stages, note the milestone dates and amounts. Some products suit staged drawdowns better than others. Fast-turnaround solutions may trade speed for cost, so clarity on urgency helps balance price and timing.
Set expectations early
State your preferred term, flexibility needs (overpayments, payment holidays), and whether fixed or variable pricing is acceptable. Providers vary in policy, and clarity saves time.
Make your case clear, fair, and not misleading
Best Business Loans is an independent introducer. We don’t lend directly or provide regulated advice; we connect you with relevant lenders or brokers based on your information.
When describing your “use of funds”, follow FCA principles for communications that are clear, fair, and not misleading. Avoid overstating benefits, disclose material risks or dependencies, and keep figures accurate and supportable with documents.
Disclosures that help you and protect users
- Costs and assumptions: show VAT and installation costs, if applicable.
- Risks and variables: note lead times, seasonality, or permissions that could affect delivery.
- Repayment realism: ensure forecasts reflect typical debtor days and current margins.
What we do and don’t do
- We help you explore suitable funding options and introduce you to finance providers.
- We do not guarantee approval or the lowest rate, and we do not handle property finance or start-up lending.
- All finance is subject to provider criteria, status, and affordability. Fees and interest apply. Non-payment can affect your credit rating and may lead to asset repossession where finance is secured.
Next steps: get a Quick Quote
Gather your purpose summary, cost breakdown, timeline, and supporting documents. Complete our Quick Quote form with these details for a faster, smarter match. Your enquiry is obligation-free, and your information is handled securely and confidentially.
Key takeaways
- Be specific: purpose, amount, timing, and commercial outcome.
- Back it up: quotes, contracts, forecasts, and sector context.
- Show affordability: repayment source and cash flow fit.
- Declare dependencies: permissions, lead times, and contingencies.
- Right details = better matches and a smoother process.
Practical examples you can adapt
Cash flow stabilisation: “£75,000 revolving facility for seasonal working capital across Q4–Q1. Draws align to inventory build and payroll; repaid from post-Christmas receivables. Forecasts show cover 2.2x at average debtor days of 42.”
Equipment acquisition: “£240,000 HP for two forklifts, 10% deposit. Supplier quote attached; delivery in six weeks. Expected to reduce third-party hire by £5,000/month and support a new warehouse contract.”
Refurbishment: “£120,000 fit-out across eight weeks, covering HVAC, lighting, and seating. Contractor proposal and schedule attached. Target +18% revenue via increased capacity and dwell time after reopening.”
Invoice funding: “£400,000 invoice discounting line. 90-day terms to supermarkets; top five debtors = 72% revenue. Aged debtor report attached; disputes <1%. Use of funds: unlock cash tied in receivables.”
Green upgrade: “£95,000 LED and solar installation. Installer EPC projections show ~£1,450/month savings. Finance to be serviced from energy savings with a 12–18 month payback window.”
Checklist before you submit your Quick Quote
- One-line purpose statement in plain English.
- Itemised costings with VAT and contingency if needed.
- Timeline and drawdown profile.
- Evidence pack: quotes, orders, or contracts.
- Cash flow impact and repayment source.
- Any security, deposits, or co-funding.
- Sector specifics and regulatory considerations.
Updated: October 2025
FAQs
Do I need to include VAT in my costings? Yes, include VAT if you will be paying it upfront. If you reclaim VAT, note the timing, since it affects short-term cash needs and product fit.
How detailed should my cost breakdown be? Enough to show credibility and allow providers to price the risk. Itemise major costs, installation, and any training or delivery charges.
What if I don’t have signed contracts yet? Provide pipeline evidence such as letters of intent, framework agreements, or order histories. State assumptions clearly and avoid overstating certainty.
Can I fund multiple purposes in one application? Yes, but separate each purpose with its own cost, timeline, and outcome to enable matching to appropriate products or blended solutions.
Ready to get matched?
Complete your Quick Quote now with a clear “use of funds” summary and supporting details to accelerate your eligibility check and introductions to suitable providers. Fast, secure, no obligation.