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Profitable, and still short of cash.
It is one of the most common surprises in business: a company can be genuinely profitable and still run short of cash. The reason is timing — money leaves the business before it comes back. This guide explains the gap, and where a short company bridge fits. On every Credicorp product, the company borrows, never you personally. No personal guarantee.
Most directors meet the cash-flow gap long before they have a name for it: the order book is full, the year looks good, and yet there is a week when the account is uncomfortably thin. Nothing is wrong with the business — the cash is simply somewhere else for a while.
Creditcorp is the growing name for the Credicorp group, and Credicorp Limited is the lender behind it. It does one thing: short-term working capital for incorporated UK businesses — finance shaped precisely around this gap. This page is a guide, not an application; when a short bridge fits, applying happens on the lender’s own site, credicorp.co.uk.
Throughout, the borrower is the company — a UK private limited company (Ltd), LLP or PLC — not the director who signs. No personal guarantee, no charge over a home, no personal credit check on a director. These are not personal loans, payday loans or sole-trader finance.
What a cash-flow gap actually is
It is a gap in time, not a gap in the accounts.
A cash-flow gap — often called a working-capital gap — is the stretch of time between the company paying out and being paid back. You buy stock, meet payroll and settle suppliers today; the customers who will fund all of that pay you weeks or months later. For every day in between, the money has left the business but not yet returned, and the company has to find the cash to keep trading.
You can picture it as a cycle. Cash buys materials. Materials become work, then finished goods or delivered services. Those are invoiced. The invoices, eventually, become cash again. The longer that loop takes — slow suppliers to pay, stock that sits, customers on long terms — the more cash the company must carry to keep the wheel turning.
A healthy gap is normal and manageable. It only becomes a problem when it widens faster than the cash on hand can cover it — which, as we will see, happens most often precisely when a company is doing well.
Why a profitable company runs short
Profit is an opinion measured over time; cash is a fact measured on the day. The four reasons the two part company.
Money is tied up in unpaid invoices
You record a sale as profit the moment you invoice it, but the cash does not arrive until the customer pays — and on 30, 60 or 90-day terms that can be a long wait. The profit is real; it is simply sitting in someone else’s bank account for now.
Money is tied up in stock
Stock on the shelf or work in progress on the bench is cash the company has already spent and not yet earned back. The busier the trade, the more stock it holds — and the more cash is locked up waiting to be sold.
Costs are paid before revenue lands
Wages, rent, materials and suppliers want paying on their schedule, not yours. Almost every cost comes out at the start of the cycle, while the revenue that covers it comes in at the end.
Growth makes the gap wider
This is the cruel twist: a company feels the squeeze most when it is winning. Every new order means buying more stock, paying more wages and carrying more invoices — all before the bigger payments arrive. Fast growth can leave a thoroughly profitable business short of cash.
A worked example
An illustration, not a real customer — just to put numbers on the shape of the gap.
A UK limited company supplying branded workwear wins a £40,000 order from a regional employer, payable 60 days after delivery. To fulfil it, the company must spend about £24,000 with its own suppliers up front — blank garments, embroidery, packaging — and pay roughly £6,000 in wages over the three weeks it takes to complete and ship. So nearly £30,000 leaves the business in the first month.
On the profit-and-loss account this is a good piece of business: a healthy margin, a happy customer, a strong month. But the cash does not match the profit. The £40,000 will not land for roughly two and a half months from the day the suppliers were paid — and in the meantime the company still has rent, its other orders and the next month’s wages to cover. That is the cash-flow gap in plain numbers: a profitable order that leaves the company temporarily short while it waits to be paid.
Where a short company bridge fits
The gap is temporary and the repayment is in sight — which is exactly what short-term working capital is built for.
A Business Bridging Loan — for a known gap
When you can name the figure and see the cash that will clear it — a confirmed order like the workwear example above — a single fixed-term bridge to the company covers the costs now and is repaid as the customer settles. More on the Bridging Loan →
Credicorp Flex — for a gap that keeps recurring
When the gap opens and closes through the year as orders come and go, a revolving facility lets the company draw as each gap appears and repay as the cash returns, paying interest only on what is drawn. More on Credicorp Flex →
Credicorp Slice — for a single supplier bill
When it is one chunky supplier invoice opening the gap, Slice pays the supplier in full today and spreads the cost over a few weeks for a flat fee. More on Credicorp Slice →
The company borrows — not you
A cash-flow gap is the company’s gap, and the borrowing that spans it is the company’s borrowing. On every Credicorp product the agreement is between Credicorp Limited and your company, not you as a director:
- No personal guarantee — the company is the borrower, full stop.
- No charge over your home — your house is not security for a working-capital gap.
- No personal credit check on a director — the lender looks at the business, not your own file.
- Bodies corporate only — UK Ltd, LLP or PLC, never a sole trader or an individual.
This is exempt business lending under Article 60B of the FSMA Regulated Activities Order 2001, not consumer credit. The plain-English position is on our lending and regulation page, with the fuller detail on creditcorpgroup.co.uk.
Common questions
The questions directors ask most about cash flow versus profit. For anything specific to your company, the lender’s team are on credicorp.co.uk.
What is a cash-flow gap?
A cash-flow gap — sometimes called a working-capital gap — is the stretch of time between a company paying its costs and being paid by its customers. You buy stock, pay staff and settle suppliers now; the money for the work comes back later. The gap is the period in between, when the cash has gone out but not yet come back in.
How can a profitable company run out of cash?
Profit and cash are not the same thing. Profit is what is left after costs over a period; cash is what is actually in the account on a given day. A company can be comfortably profitable on paper yet short of cash because its money is tied up in unpaid invoices, stock on the shelf and costs already paid out. The faster it grows, the wider that gap can become.
What is the difference between profit and cash flow?
Profit measures performance over time — revenue minus costs. Cash flow measures the timing of money in and out. You can record a sale as profit the day you invoice it, but the cash may not land for 30, 60 or 90 days. A business lives or dies on cash flow day to day, even when the profit-and-loss account looks healthy.
Where does a short-term bridge fit?
A short company bridge fits when the gap is temporary and the repayment is in sight — a confirmed order, an invoice on terms, a season nearly here. It covers the costs now and is repaid as the money you can already see arrives. It is not for funding a loss; it is for spanning a timing gap with a known end.
Is this consumer credit or a regulated loan?
Neither in the consumer sense. Credicorp lends only to bodies corporate, and under Article 60B of the FSMA Regulated Activities Order 2001 lending to a body corporate is not a regulated credit agreement. It is exempt business lending — not consumer credit, not a sole-trader or personal loan. The full position is on our lending and regulation page and on creditcorpgroup.co.uk.
More general questions are answered on the Creditcorp FAQ, and the how-it-works overview walks through the whole journey from first look to funds in the bank.
Where to go next
- Working-capital gap tool — sketch the size and length of your own gap.
- Short-term vs long-term finance — matching the term of borrowing to the life of the need.
- Is short-term borrowing right for you? — an honest decision aid, including when not to borrow.
- Business finance jargon buster — plain-English definitions of the terms used across this site.
- The three products — Business Bridging Loan, Credicorp Flex and Credicorp Slice.
- creditcorpgroup.co.uk — the deeper group, company and regulation detail.
When a short bridge is the right fit, applying, drawing down and managing your account all happen on the lender’s site, credicorp.co.uk.
Span the gap, not the year
If a temporary gap is in front of you, see how the three products fit — or apply on the lender’s site, credicorp.co.uk.