Growth Street offers UK businesses a secured revolving credit facility of up to £1 million. The peer-to-peer lender's aim is to help unlock cash tied up in unpaid invoices, stock or "work in progress". It has matched more than £500m of investors' funds with growing businesses.
Growth Street’s finance product “GrowthLine” offers UK businesses a line of credit as an alternative to traditional, expensive bank overdrafts or term loans – having spotted a need for businesses to get more flexibility when managing cash flow. You get a spending limit and can withdraw cash and make repayments when you wish during the month. But you’ll only pay for the money you use, so if your balance is at £0 for the month, you won’t pay anything for that period.
Managing your cash flow can be a drain on time and energy. You could be managing your company’s seasonal cycles or trying to work out the timings of invoice payments against your staff’s wages. GrowthLine may help as it allows you to have a source of cash available for the inevitable hiccups that come with being in business. It all comes in return for the relatively small monthly service fee and an interest rate that’s based on Growth Street’s assessment of your company’s risk profile.
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Growth Street’s GrowthLine allows you to borrow up to 85% of the value of your invoices, 35% of the value of your stock or up to 35% of the value of any “work in progress”.
Growth Street will use your business’s assets (your invoices, stock or ongoing work) to calculate exactly how much credit it can offer you. It will then agree the rates at which it can lend against those assets. For your GrowthLine facility to remain affordable, your business profits need to be a minimum of 1.5 times the cost of the GrowthLine.
GrowthLine functions as a rolling overdraft and doesn’t really have a set duration. You pay as much as you want until the balance is cleared and then nothing again until you take out more money.
Growth Street will use your business’s assets to work out how much credit to offer you. It will then agree the rates at which it will lend to you. Always check what you will need to pay back in total before you agree to a credit facility.
Growth Street will provide you with an instant decision on a credit line based on the details you submit in your application and your trading accounts. Once Growth Street has underwritten a credit limit, within two hours of that decision, a client can draw down and repay as much or little as they like within that credit limit (assuming the business is still performing as well as or better than it was) when it was underwritten. You can use your online dashboard to withdraw funds at any time.
Growth Street will always look to secure against assets in your business. It does this by registering a fixed and floating debenture – that’s a charge over all the business’s assets. In some circumstances, it will also ask for a personal guarantee, which is a written promise from business directors, guaranteeing payment of the loan if the business fails to keep up with repayments.
How does it work?
Fill out the simple application form on the Growth Street website with some basic details about you, any other key parties and your business.
For businesses with annual turnover below a specified amount, the application process has been streamlined. You’ll be asked to share your most recent set of company accounts and the last three months of bank statements.
For businesses with annual turnover over a specified amount, you’ll be asked to connect your banking data with the Growth Street online platform so it can consider your accounts in more detail.
Am I eligible for a Growth Street business loan?
You should only apply for a Growth Street credit line if you’re certain you can meet the repayment terms. You must also meet the following criteria:
Minimum trading requirement
Limited Company,Limited Liability Partnership,Public Limited Company
Additional eligibility info
The majority of directors and shareholders must be UK residents. The business must have at least 1 year of filed annual accounts, and be profitable with a positive balance sheet.
Growth Street lends to a range of industries. However, it does not currently provide facilities to businesses that are engaged in:
E-money/Bitcoin/digital currency issuers
Any financial services business regulated by either the FCA or PRA
Life science and experimental companies
Mining companies involved in exploration and extraction
Any lending or asset-based finance businesses
Political parties, pressure groups and think-tanks
Private security firms
Growth Street aims to cut out as much administration for you as possible to make the whole process quicker. By accessing both your current and historic accounting data, it can also gain a better understanding of your business. It can then have more informed discussions with you about your plans for growth. Depending on your company’s performance and risk profile, Growth Street is potentially able to increase your GrowthLine limit or adjust the rates it is charging you.
Growth Street has an online dashboard which gives you a 360-degree view of your GrowthLine account. You can draw down cash, make repayments and access information regarding your account activity, including:
Your total and available GrowthLine limits
The amount you’re currently borrowing
Information about interest charges and fees
A record of transactions on your account
Downloadable monthly statements
You can request to draw down funds from your available limit directly from your dashboard. Click “Request a Loan” and enter the amount you wish to borrow. Once confirmed, Growth Street aims to process your request within the same working day (if received before 3pm).
Chris Lilly is a publisher at finder.com. He's a specialist in credit-based products including business and personal loans, mortgages and credit cards, and is passionate about helping UK consumers make informed decisions about their borrowing. In his spare time Chris likes forcing his kids to exercise more.
Business loan statisticsBusinesses all over the UK face financial instability daily, which often requires outside funding. We have looked into how the state of borrowing for these businesses differs between the industry, over the years, and for the size of the business.
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