What’s the best way to fund monthly business expenses?

Every business has costs that come around like clockwork. Rent, payroll, utilities, insurance, supplier payments – they all need paying whether you've had a great month or a tough one. The question isn't whether you'll have these expenses (you will), but how you'll fund them in the smartest way possible. 

Let's take a look at your options.

Business credit cards

For everyday costs, business credit cards can be one of the most convenient options. They work well for things like office supplies, software subscriptions or paying smaller suppliers.

The main advantage is simplicity, as you spend, then pay off the balance when it suits your cash flow. Most cards give you an interest-free grace period (ours is up to 42 days interest-free), which helps when invoices are running late. Some even offer cashback rewards, like the Funding Circle Cashback Business credit card with its 2% on all purchases for the first six months (up to £2,000) and then 1% thereafter. 

They’re also useful for covering recurring monthly payments, particularly when your cash flow varies. Just be sure you’ve got the funds to clear the balance, as missing payments can lead to mounting arrears.

Overdrafts

Business overdrafts can help with monthly expenses when your income doesn't line up with your outgoings. They're potentially useful if you have irregular revenue but fixed monthly costs like rent and utilities.

The advantage is flexibility, as you can dip into your overdraft to cover the month's expenses, then pay it back when invoices clear or seasonal revenue picks up. There's no application process each time you need to use it.

But overdrafts aren't really designed as a long-term funding strategy for monthly expenses. The rates are typically higher than other forms of borrowing, and relying on your overdraft month after month can become expensive. Plus, banks can reduce or withdraw overdraft facilities with relatively short notice, which could leave you stuck if you're depending on it for regular costs.

Buy now, pay later for business

Business BNPL services are becoming more common, letting you take delivery of stock or services now and spread the payments over a few months. For monthly expenses, they tend to work best for predictable costs like quarterly insurance payments or annual software licenses that you can break into chunks.

Many BNPL options are interest-free for short periods, and approval is usually straightforward. It's particularly handy when you want to take advantage of annual payment discounts but prefer to spread the cost.

There is a downside however. Payment terms are typically quite short – usually just 30-90 days – which might not give you enough breathing room for larger monthly expenses. And not all suppliers offer BNPL options, so your choices might be limited.

FlexiPay: Complete payment flexibility

FlexiPay from Funding Circle takes a different approach to funding monthly business expenses. You can pay any business cost upfront, whether by card, bank transfer or even paying directly into your business account. Then you choose exactly how you want to repay over 1, 3, 6, 9 or 12 months.

Using FlexiPay can help you cover all sorts of monthly expenses, like spreading your quarterly VAT bill over several months. Or you can break down large supplier payments and use it to handle payroll costs when cash flow is tight. There's no interest either; only one transparent flat fee per transaction, and credit limits go up to £250,000.

FlexiPay also gives you control. Unlike fixed loan repayments, you choose the timeframe that works with your business rhythm. If there’s a busy season coming up, spread the cost over longer periods. Or if your cash flow needs improving, pay things off faster.

Healthy cash flow? Get rewarded for your spending

If your cash flow is strong and you can comfortably cover your regular expenses each month, a business credit card with cashback rewards is an excellent choice. 

With Funding Circle's Cashback business credit card, you'll earn 2% cashback for the first 6 months (up to £2,000) then 1% uncapped after that. That’s money back on the essential spending you're already doing, from software subscriptions to stock purchases. 

It’s a simple way to make your money work harder for you without changing your payment habits. The convenience is unbeatable, and the rewards add a welcome boost to your bottom line.

Need more breathing room? Spread your costs

If you need more flexibility, or if large payments create temporary strain, FlexiPay is designed to give you control over your cash flow. It allows you to spread the cost of your expenses over 1-12 months, aligning repayments with your income cycle. 

This is perfect for smoothing out lumpy costs, like quarterly VAT bills, annual insurance premiums, or significant inventory purchases. Instead of facing one large outlay, you can turn it into manageable monthly payments, freeing up capital for growth and other opportunities.

Ultimately, the choice is simple: if you can pay it off now, get cashback. If you need more time, get the flexibility to pay later. 

Plus, we’ve waived the foreign exchange fees on both our FlexiPay and Cashback business credit cards. So the price you agree is the price you pay – no unexpected charges. 

Getting the mix right

The best approach depends on your understanding of your own cash flow patterns. Look at your last six months of expenses and income. Where are the regular pain points? Which months are consistently tough? What expenses could you smooth out with better timing?

Most business funding providers, including Funding Circle, let limited companies check eligibility without affecting credit scores. That means you can explore multiple options and build a funding strategy that actually works for your situation.

Your monthly expenses, your way

Monthly business expenses don't have to be a constant stress. With the right mix of funding options, you can smooth out the bumps and focus on what you do best, like running your business. Choose solutions that give you control and transparency, as well as the flexibility to adapt as your business grows.

15/10/2025 While we want to help as much as we can, the information found here is provided solely for informational purposes and should not be considered financial or legal advice. To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, the information contained here. If you have any questions, please speak to your professional adviser or seek independent legal advice.