When is business loan money paid out?

Conditions precedent to drawdown

Every credit agreement contains a list of conditions that must be satisfied before the lender will release money. For simple unsecured term loans, the only condition is usually the signed agreement being returned. For secured facilities, conditions typically include receipt of a satisfactory property valuation, registration of the charge at Companies House, confirmation of insurance, and solicitor sign-off.

Drawdown cannot occur until every condition is met. Chasing the lender to release early is not productive and will not be accepted.

Payment timing and bank cut-offs

Once the lender's operations team processes the drawdown instruction, funds move via Faster Payments (typically up to £1 million, arriving within two hours) or CHAPS (for larger amounts, same-day but with a processing cut-off, commonly 3 pm). If a completion is finalised after the cut-off, payment moves on the next business day.

Weekends and bank holidays delay CHAPS payments; Faster Payments operates around the clock but lenders' internal processing may not.

Revolving credit facilities

A revolving facility — an overdraft-style arrangement where you draw and repay repeatedly — requires a separate drawdown request each time funds are needed. The agreement will specify notice periods (often same-day or next-day) and any minimum draw amounts. Interest accrues only on the drawn balance, not the full facility limit.

What can delay payment after completion

• Anti-money-laundering checks on the receiving account if it has not been used with the lender before
• Discrepancies between account names on the agreement and the receiving bank account
• Internal fraud-prevention holds triggered by payment size or pattern
• Technical payment failures requiring manual re-submission

If funds have not arrived within two business days of the expected date, contact the lender's operations team directly with your drawdown reference number.