When cash is desperate, low-margin or even loss-making work can look like oxygen. Occasionally it is; as a strategy it can quietly kill a company.
The short-term case
Very occasionally, work that contributes something towards fixed costs and keeps cash moving is better than idle capacity, if it genuinely bridges to a stronger position. The key word is bridge.
The trap
Repeatedly taking work below cost trains customers to expect low prices, fills capacity that could serve profitable work, and disguises the real problem. It turns a revenue problem into a slow bleed.
Judge each job on cash and margin
Ask whether a specific job improves your cash position without locking you into loss-making commitments. If it is a one-off bridge, maybe. If it is becoming your business model, stop and fix the pricing.
Underpricing is a common route into difficulty; watch it closely.
We lend only to UK limited companies and LLPs, and the loan is to the company with no director personal guarantee. As business finance outside the consumer-credit regime, it is not covered by the Financial Ombudsman Service or FSCS.
See also: The difference between a cost problem and a revenue problem, Surviving a sudden rise in costs, Building a realistic turnaround plan on one page.