Finance for commercial cleaning companies

A commercial cleaning company is a payroll business. Most of what you spend is wages, paid weekly or monthly, while your clients pay on credit terms. Growth makes it worse before it makes it better: every new contract adds wages weeks before it adds income. Finance for a cleaning company should fund that gap and grow with your contracts.

The cash-flow shape of a cleaning company

Take a new office contract starting on the 1st. Your team starts cleaning that night. You pay them at the end of the week or month. You invoice at month end. The client pays on its terms. For business-to-business deals an agreed payment date must usually be within 60 days, and with no agreed date, payment is late 30 days after the invoice or the service, whichever is later. So you can pay several weeks of wages before the first payment for the contract arrives.

Wage rates are set by law at the bottom end. The National Living Wage for workers aged 21 and over has been £12.71 an hour since April 2026. When it rises each April, your costs rise on day one. Your contract prices may not, unless the contract says so.

Other costs bunch up at the start of a contract: equipment, consumables, uniforms, vetting, and sometimes a vehicle.

Which finance fits, and which doesn't

Invoice finance is the strongest fit. It advances most of an invoice's value soon after you raise it, so this month's invoices pay this month's wages. The facility grows as you win contracts, which is exactly when you need more.

Merchant cash advances rarely suit commercial cleaners: clients pay by bank transfer, not card, so an advance would be collected by fixed debits that don't flex with your contracts.

What it costs: a worked example

Say the company needs £50,000 to mobilise two new contracts and is offered a cash advance at a factor rate of 1.20 over about 6 months, collected daily.

• You repay £60,000 in total.
• That is roughly 126 daily payments of £476.19.
• The cost is £10,000.
• As an APR, that is about 75%.

Sterling's rule of thumb calls 50–100% APR "expensive short-term money". The question is whether two contracts make £10,000 of profit in six months after wages. On a low-margin contract, often not. Invoice finance on the same contracts is priced differently, usually as a service fee plus a charge on the money you draw, so ask for a quote and compare the two as APRs. The "how much can I borrow" calculator on this page gives a rough guide to what your turnover supports.

Late-paying clients can be charged a fixed recovery sum on top of the debt: £40 up to £999.99, £70 from £1,000 to £9,999.99, and £100 for £10,000 or more.

What funders typically ask a cleaning company for

• An aged debtor list and copies of the main contracts.
• Bank statements for the last several months.
• Filed accounts at Companies House and management accounts.
• Payroll records or summaries, to show wage costs against contract income.
• Details of contract length and notice periods.

A director's personal guarantee may be required, and a funder may run a credit search, which could be a soft search.

Red flags specific to cleaning

1. Contracts priced before the April wage rise. If your prices are fixed but the wage floor moves, the margin a funder is relying on shrinks every year.
2. Short notice periods. A contract the client can end on 30 days' notice is weaker security than it looks, and funders know it.
3. One client, most of the turnover. If a single facilities firm or landlord is most of your income, losing them would leave finance repayments and no contract.

Limited companies only

Lots of domestic cleaners and small cleaning businesses trade as sole traders, and that's a sensible way to start. Ask Sterling can only introduce limited companies, because introducing sole traders and small partnerships is regulated credit broking. Business finance for limited companies is not regulated by the Financial Conduct Authority.