Finance Guide
Even a profitable business can run short of cash. Working capital finance is designed to bridge those gaps, whether you are waiting on an invoice, funding seasonal stock or covering costs while a large project ramps up.
Working capital is the difference between what your business has coming in and what it needs to pay out in the short term. When this gap opens up, working capital finance fills it. Unlike asset finance (which funds a specific purchase) or long-term property loans, working capital products are designed for the operating cycle: buying stock, covering wages, paying suppliers, and keeping the doors open while customers pay their invoices.
The product you need depends on what is causing the cash flow gap and how your business generates revenue.
A revolving credit facility with a set limit. You draw down what you need, repay it as cash comes in, and the limit resets. Interest is only charged on the outstanding balance, not the full limit. Flexible and ongoing, it suits businesses with variable cash needs rather than a single specific expense.
Lines of credit can be secured (against property or business assets) or unsecured. Unsecured options are faster to set up but carry higher rates. Secured lines against property can be quite cost-effective if you have the equity.
Best for: businesses with variable monthly costs, seasonal revenue swings, or the need for a buffer without committing to a fixed-term loan.
If your cash flow problem is that customers are slow to pay, debtor finance may be more targeted than a loan. You raise an invoice, the lender advances you 70 to 90% of its value immediately, and releases the remainder (minus fees) when the customer pays. The facility grows as your revenue grows, which is useful for businesses that cannot take on a fixed loan sized to last year's revenue.
Two main forms:
Best for: B2B businesses with 30 to 90-day payment terms, growing businesses whose cash needs are outpacing their working capital, or project-based businesses invoicing large amounts infrequently.
A fixed-term unsecured loan for 3 to 24 months, funded quickly (sometimes same or next business day). Rates are higher than secured products, but the speed and simplicity makes this useful when you need cash fast for a specific purpose: a large supplier invoice, a tax bill, covering a temporary revenue dip, or funding a growth opportunity.
Assessed on business bank statements and revenue rather than full financials. Most non-bank lenders require 6 months of trading history and monthly turnover of $10,000 or more.
Best for: one-off cash needs, time-sensitive opportunities, or businesses that do not have property security to offer.
Funds the purchase of goods from a supplier before you receive payment from your customer. Common in import and wholesale businesses where you need to pay for stock upfront but will not be paid until it is sold. The lender pays the supplier and you repay the lender once the goods are sold and payment is received.
Best for: importers, wholesalers and distributors managing a gap between purchase and sale.
Common situations where working capital finance adds real value:
Costs vary significantly across products and lenders. Debtor finance charges a discount rate on the invoice value plus a service or management fee. Lines of credit charge interest on drawn balances. Short-term loans express cost as an annual rate or a monthly factor rate. Always ask for a total cost of finance figure, not just the rate, and compare that across options.
As an independent broker, we compare working capital products across bank and non-bank lenders and present you with a clear view of what each option actually costs. No single lender product, no incentive to push one over another.
We compare working capital, cashflow and debtor finance options across bank and non-bank lenders. Tell us your situation and we will identify the most suitable product.