Lines of credit and working capital facilities to manage cash flow gaps, fund growth, and smooth seasonal variations in your business.
$20K-$100K
$50K-$2M+
80-85% advance
Import/Export
Working capital is the lifeblood of operating businesses - the cash required to fund day-to-day operations between paying suppliers and receiving customer payments.
A wholesale distributor might pay suppliers on 7-day terms but not receive payment from retailers for 60 days, creating a 53-day cash gap. A manufacturer pays for raw materials immediately but waits 90-120 days through production and collection cycles before receiving revenue.
Without adequate working capital, profitable businesses can fail simply from timing mismatches. The fundamental challenge is the cash conversion cycle - the time between outlaying cash for business inputs and receiving cash from customers.
Inventory Days + Receivable Days - Payable Days = Cash Cycle
Working capital finance differs fundamentally from traditional loans. Understanding the difference helps you choose the right structure.
Different structures suit different business needs. We help match the right facility to your cash flow cycle.
Extends negative balance on business account. Typically $20K-$100K for small businesses. Interest calculated daily on overdrawn balance.
Separate facility from transaction account. $50K-$500K typical. Fixed review periods (12-24 months). More formal structure than overdraft.
Specifically for import/export businesses. Pays supplier directly, repaid when goods sold. Typically 90-180 day terms.
Advances funds against outstanding invoices. Typically 80-85% of invoice value advanced within 24 hours.
Secured against stock holdings. Common in automotive, equipment dealers. 50-70% advance against inventory value.
Wholesale Building Supplies - Bendigo, Victoria
$3.2M
35%
73 Days
$350K
| Monthly Revenue | $265,000 |
| Monthly COGS | $186,000 |
| Supplier Payment Terms | 7 days |
| Customer Payment Terms | 60 days |
| Working Capital Required | $640,000 |
+$180,000/yr
-$24,830/yr
+$155,170/yr
Recognise when your business needs working capital finance to maintain momentum.
Tourism off-season costs, agricultural expenses before harvest, construction slowdowns, retail stock build-up.
Increasing inventory for higher demand, extended credit to new customers, additional staff before revenue realised.
Large retailers demanding 60-90 day terms, government contracts with 30-60 day cycles, progress payments.
Project-based irregular payments, professional services with quarterly receipts, manufacturers with irregular orders.
Understanding what lenders look for helps you prepare a stronger application.
Learn from others' experiences to make better financing decisions.
Profitable businesses can have terrible cash flow. Cash is tied up in inventory and receivables. Manage cash flow separately from profitability.
Lenders are reluctant when businesses are desperate. Establish facilities during strong periods to get better terms and higher limits.
Working capital is for temporary, revolving needs. Equipment and property require term loans with structured repayment schedules.
Without tracking inventory, receivable, and payable days, you can't understand requirements. Small improvements have big impact.
Build in headroom for growth. If you need $250K, establish $350K-$400K. You only pay interest on drawn amounts.
Understanding these metrics helps you present a stronger application.
Inventory Days + Receivable Days - Payable Days. Lower is better.
Current Assets ÷ Current Liabilities. Minimum 1.2:1 required.
(Current Assets - Inventory) ÷ Current Liabilities. Minimum 0.8:1.
Current Assets - Current Liabilities. Positive required.
(Accounts Receivable ÷ Revenue) × 365. Track trends.
Avg Drawn Balance ÷ Facility Limit. 70-85% optimal.
Book a consultation to explore cash flow and working capital financing options tailored to your business needs.
Disclaimer: Mortgage & Finance Advisory is a boutique finance advisory service. This information is general in nature and does not constitute financial advice. Working capital requirements and facility structures vary significantly based on industry sector, business model, and growth stage. All applications are subject to lender credit assessment and approval. We recommend speaking with one of our advisers to discuss your specific circumstances.
