Contract Finance

Get the funding you need against contracts, licences and retainers with contract finance.

  • Compare a wide range of lenders and rates
  • Check your eligibility in minutes
  • Find out how much you could borrow
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Written by Jamie Moorcroft | Reviewed by Richard Wilcock | Updated: December 05, 2023

What is Contract Finance?

Contract finance is used to fulfil contracts, licences, subscriptions or retainers when you don’t have the funds available in your business. This funding removes the need to wait around for your clients to pay you before accepting and fulfilling other contracts.

This type of finance is perfect for any business working under contract as you can confidently accept new contracts knowing you won’t be short on funds to pay for equipment, suppliers, or employees. It helps support business growth at a much faster rate.

Contract finance can be used standalone or as part of a broader suite of trade finance products.

Read more about how it works and how to apply for contract finance below.

Manufacturing business fulfilling contract work

How does Contract Finance work?

Contract finance is a relatively straightforward process. After you’ve chosen a provider, they will take your new contract as security and advance the funds against your contractual billing.

  1. Submit your contractual billing to your chosen provider.
  2. They’ll release the agreed percentage of the contract value within 24 hours (less any charges or fees).
  3. Once your customer makes a payment to the lender, the outstanding money is released back to you.


Let’s say you’re a clothing shop, and you’ve had an order come in for a large shipment. You might not have the funds to buy material, pay workers, and generally fulfil the shipment. Taking out contract finance means you don’t have to worry about coming up short in the financial department. Contract finance means you’ll be able to easily maintain much-needed cash flow as you work to complete this order.

Lucrative contracts can transform your business; you shouldn’t have to turn them down just because you haven’t been paid from past jobs. With contract finance, you don’t need to hang around; you can accept any job that comes your way with confidence, knowing that financially, you’re covered.

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What are the benefits of Contract Finance?

There are many benefits of contract finance; the main benefit even if you don’t have the cash reserve required, you can accept larger contracts. Which means you have the chance to build your business at scale.

  • Contract finance helps maintain a steady cash flow. Cash flow is a significant problem for UK SMEs, whether it’s due to late customer payments or long invoice payment terms.
  • Contract finance can remove any financial worries you may have that stem from delayed or lengthy client payments.

Is Contract Finance right for my business?

Regardless of the industry sector, this type of finance can help you whether you’re in the construction, automotive, marketing, IT or service industries. If your business operates under contract work, contract finance can help you.

Before you go any further, it’s essential to see whether you meet the basic criteria for application:

  • You have an annual turnover of £250,000 plus
  • You have contracts with companies based in the UK
  • The clients you work alongside aren’t a credit risk
  • You supply goods and services under contracts

How do I apply for Contract Financing?

Applying for contract finance with Capalona is quick and simple. Fill in our short form online with a few basic details about your business, and we'll match you to suitable lenders in minutes. After you've reviewed your loan options, you can request quotes directly from the lenders. They will then contact you directly (either by phone or email) to discuss your contract finance quote.

There is zero obligation to accept any of our UK lender quotes. You can take your time and compare finance options. If you choose to move forward with one of our providers, they will complete the application with you, and you can receive funds within 24 hours.

Please note: The finance company will want to see a detailed contract from your reputable customer or client. They need assurance that the customer will be able to pay for your contract after it’s completed.

Why use Capalona for Contract Financing?

We’re online digital brokers, which means our finance comparison tool is 100% free for you to use. Our simple, quick and easy loan matching tool helps business owners locate and compare the best finance options for their needs. Let’s face it; you’d rather be getting on with running your business than sifting through contract finance providers.

  • Get matched to the right funding options in 2 minutes
  • Compare a wide range of leading business finance lenders
  • It's fast, free and won't affect your credit score
  • We are authorised and regulated by the FCA and are members of the NACFB and FSB

About the author

Jamie Moorcroft
Written by Jamie Moorcroft

Money Writer, Director and Co-Founder

Jamie has over ten years of experience in the consumer and business finance industry, and with a background in graphic design, Jamie heads up the creative and design team at Capalona.

Updated: December 05, 2023
Published: March 02, 2021
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What our customers say...

Adrian TCapalona verified review


Amazingly fast, efficient service, minimal paperwork. So much faster than my business bank of twelve years.

Jasmine MCapalona verified review


Thanks to Capalona providing a great service, I was able to speedily find a solution to my cash flow issue in my business.

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