Inflation has been making headlines for months — but for many UK business owners, it’s more than a news story. It’s a daily challenge that affects supplier costs, customer spending, and the stability of your cash reserves.
At Shadowfax Funding, we’ve seen first-hand how inflation pressures can squeeze even the most well-run businesses. The good news? There are proven strategies — and funding tools — to help you weather the storm.
Why Inflation Hits Cash Flow So Hard
When prices rise, the gap between money going out and money coming in often widens. You might be paying more for stock, fuel, or wages, while customers take longer to pay invoices. This mismatch can leave you short of working capital — the lifeblood of your operations.
If left unaddressed, a temporary cash-flow gap can quickly spiral into missed opportunities or, worse, financial distress. That’s why it’s critical to plan for resilience before you hit a crisis point.
Funding Tools That Protect Cash Flow
Here are some of the most effective ways UK businesses are staying liquid in 2025:
1. Invoice Finance
If you’re waiting 30–90 days for customers to pay, invoice finance can release up to 90% of the value immediately. This means you can cover wages, pay suppliers, and keep operations running without chasing payments.
Example: A haulage firm facing high diesel costs used invoice finance to bridge the gap between deliveries and customer payment, avoiding expensive overdraft fees. The client also protected themselves with bad debt protection to ensure the risk of non payment was covered.
For more information on invoice finance see here or view a previous post on invoice finance here.
2. Secured Overdrafts
Unlike traditional bank overdrafts, a secured overdraft leverages your property as security, offering higher limits and more flexible terms. It’s an ideal buffer for businesses with seasonal sales or lumpy income.
3. Revolving Credit Facilities
Think of it as a reusable loan. You borrow what you need, repay, and then draw down again — without going through a fresh application every time. This flexibility is invaluable during uncertain economic conditions.
4. Short-Term Loans
A well-structured short-term loan can plug an urgent gap without long-term commitment. The key is working with a broker like ourselves who understands your sector and can match you with the right lender — quickly.
Cash-Flow Management Beyond Funding
While finance can give you breathing space, resilience also depends on operational decisions:
- Tighten credit control — Reduce debtor days by invoicing promptly and following up on late payments.
- Review supplier contracts — Negotiate better terms or bulk-purchase deals to offset inflation.
- Forecast regularly — Update cash-flow forecasts monthly to anticipate shortfalls before they occur.
Shadowfax Funding’s Perspective
As an independent funding specialist, I see too many businesses wait until they’re in a crunch before seeking help. The truth is, lenders offer better terms to companies that act early and demonstrate forward planning.
That’s where we add value — by mapping out your finance options before the gap becomes a crisis, and securing competitive rates that match your needs.
Next Steps
If inflation is tightening your margins, don’t wait for the crunch. A 20-minute funding review could uncover ways to safeguard your cash flow and keep your growth plans on track.
Contact us today
- Call 0113 5182253 now. Let’s discuss how we can transform your financial strategy and save you money like we did for others in your sector.
- Email Now: Send an email to hello@shadowfaxfunding.com this instant. Tell us about your financial challenges, and we’ll find the best solution for you.
- Book a free consultation call with a friendly member of our team by clicking here