Quick answer
A working capital loan funds the everyday running of the business, such as stock, wages, rent and supplier bills, while your own cash is tied up in unpaid invoices or unsold stock. Trading businesses can often access $5,000 to $500,000 unsecured, sized on turnover and bank statements, with same-day funding possible for smaller amounts.
Key points
- Working capital is the cash tied up between paying for things and getting paid.
- Growth, slow payers and stock all soak it up.
- A loan or line can top it up without selling assets or delaying staff.
- Size it on the gap, not on what's on offer.
- Typical amount
- $5k – $500k unsecured
- Bigger needs
- $20k – $5m with property
- Speed
- Same day possible for smaller sums
- Sized on
- Turnover and bank statements
Working capital is the money that keeps the lights on between buying and getting paid. You buy stock, pay staff, cover rent, then wait for sales and invoices to turn back into cash. The longer that wait, the more working capital the business soaks up. When it runs dry, even a profitable business can’t pay this week’s bills.
A working capital loan tops it up, fast.
Where does working capital go?
Think of three buckets that hold your cash hostage:
| Bucket | What’s happening | Example |
|---|---|---|
| Stock | You’ve paid for goods that haven’t sold yet | A retailer’s shelves before the Christmas rush |
| Debtors | You’ve done the work but haven’t been paid | A trade business on 30-day terms that are really 55 days |
| Prepayments | You’ve paid upfront for something you’ll use later | Annual insurance, registrations, a bond |
Against that sit your creditors: the bills you haven’t paid yet. When debtors and stock grow faster than creditors, cash shrinks. That’s why fast-growing businesses so often feel broke. Our guide to being profitable but cash-poor explains this in more detail.
When does a working capital loan make sense?
It fits when the business is fundamentally sound but timing is working against it:
- Growth. New customers mean more stock and more invoices before any extra cash arrives.
- Slow payers. A big customer that stretches terms can absorb tens of thousands of dollars of your cash.
- Seasonality. Buying up before a peak, or surviving a trough.
- One-off shocks. A repair, an audit, a supplier demanding payment upfront.
It’s not a fix for a business that loses money every month. Cash borrowed to cover ongoing losses just makes the hole deeper.
Timing problem rather than a profit problem? Start a quick enquiry and we’ll look at the shape of your gap.
How fast can a working capital loan land?
For smaller unsecured amounts, same-day funding is possible once the lender has your bank statements, ID and business details and has verified them. Larger amounts, or those secured against property, take a little longer, though $20k to $250k is possible same day with property security, and up to $5m is possible within 24 to 48 hours.
How much should you borrow?
Enough to cover the gap, plus a sensible buffer, and no more. To find the number:
- List the cash you expect in over the next eight to twelve weeks, with dates.
- List the bills you must pay in the same period, with dates.
- Track the running balance week by week.
- The lowest point (below the buffer you want to keep) is your gap.
That’s exactly what our cash gap calculator does for you. Many owners are surprised the real gap is smaller than the number in their head.
Loan or line?
A working capital loan is a lump sum for a specific gap. A working capital line (a business cash line) lets you draw, repay and draw again up to a limit. If your gaps are irregular but recurring, a line often makes more sense. If it’s a single event, such as a big stock order, a loan is simpler.
What lenders check for working capital
- Turnover and its pattern. Steady monthly deposits make sizing straightforward.
- Account conduct. Frequent dishonours or a permanently overdrawn account raise questions.
- Existing debt. Other loans and cash advances reduce how much can be added.
- ATO position. A tax debt isn’t automatically a problem, especially if it’s on a payment plan.
Three signs you need more working capital
- You’re paying suppliers later than you’d like, and they’ve started to notice.
- You’re saying no to orders because you can’t fund the stock or labour upfront.
- The account is fine on paper at month end but dips badly mid-month, every month.
Any one of these suggests the business has outgrown the cash it holds. A working capital top-up, sized on your turnover, can reset the cycle so you’re paying on time and taking the work you want.
An illustrative example
Illustrative only. An online homewares store doubles its order volume after a successful campaign. It now needs $90k of stock every six weeks, but the payment platform holds funds for several days and wholesale customers pay on 30 days. The owner’s bank statements show 18 months of rising deposits. A working capital facility sized on that turnover lets her reorder on time instead of turning orders away.
Find out what your business can access
If your business is busy but the account doesn’t show it, a working capital top-up could be the difference between saying yes to growth and saying sorry to customers. Enquiring takes about a minute, there’s no credit check to ask the question, and we don’t broadcast your details to a long list of lenders. A real person reviews your situation and gives you a call.
Please give us accurate figures for turnover and the amount you need. It makes the first conversation far more useful.
Frequently asked questions
What is working capital in simple terms?
It's the cash a business needs to keep operating between paying its costs and getting paid by customers. Stock on the shelf and invoices not yet paid both hold working capital.
How is a working capital loan different from a normal business loan?
The purpose. A working capital loan funds day-to-day operating costs rather than a long-term asset such as a building or vehicle, so it's usually shorter and sized on trading performance.
Can a new business get a working capital loan?
It's harder without a trading history, because unsecured amounts are sized on bank statements. A business owner with property equity has more options, since the security does more of the work.
How much working capital should a business hold?
There's no single number. Many owners aim to hold enough cash to cover several weeks of fixed costs. Our cash runway guide shows how to count how many weeks you could last.
Can I use a working capital loan to pay the ATO?
Yes, a tax bill is a legitimate business expense. Whether a loan or an ATO payment plan is better depends on the amount, timing and cost, so it's worth comparing both.