How are business loan funds actually paid to my

2 min read

Business accountWhere funds land

Faster PaymentsCommon method

Same dayWithin cut-offs

CHAPSFor large sums

The payment mechanism

At drawdown the lender transfers the funds to the business bank account you nominated on the application. Most use Faster Payments, which typically clears within hours on a banking day. Very large amounts may go by CHAPS, a same-day guaranteed transfer that sometimes carries a small fee.

Timing and cut-offs

How fast the money lands depends on when the lender releases it against payment cut-off times. Released in the morning, funds usually arrive the same day; released late, they may land the next banking day. Weekends and bank holidays can add a day, as covered in when the money arrives.

Making sure it reaches you

Double-check the account details you give — a wrong sort code or account number delays everything. Confirm the funds have cleared before committing to the spend they are for, and set up your repayment mechanism straight away, since the schedule begins from drawdown. Model it with the repayment calculator.

Frequently asked questions

Can loan funds go to a personal account?

For a company loan the funds go to the company's business account, not a director's personal one. Paying a company loan into a personal account creates accounting and director's-loan complications, so lenders avoid it.

Is there a fee to receive the funds?

Faster Payments transfers are normally free to receive. A CHAPS payment for a large sum may carry a small fee, which the lender will tell you about. The cost of the loan is in the rate and fees, not the transfer.