Working Capital Finance

A working capital loan is short-term funding provided to a business that allows it to keep running from day to day. This means that the operational expenses of the business are covered, even if the business isn't making enough working capital to cover those expenses.

Find out how this loan works and if it's right for you.

How does working capital finance work?

There are many purposes for a working capital loan, such as finding the money to pay your employees who have been waiting for their wages, to tide your business over until the Christmas period comes round again, growing your team as you and your current employees can't handle the rush or purchasing new stock for your business if demand outweighs supply.

Depending on the lender, a working capital loan is an unsecured business loan, which means you do not have to put down any assets in order to be approved. Rates vary between lenders and some lenders offer risk-based pricing, so the rate will vary between businesses.

What are the main benefits of this loan?

The main reasons you would benefit from this type of loan are as follows:

• Easy online application process. Most lenders allow you to apply online for a business loan.
• Flexible repayment terms. As lenders are aware this type of loan is for businesses where cash flow ebbs and flows, they generally offer flexible repayment terms.
• Loan terms. The minimum loan term is 1 month and the maximum is 18, so you can select the loan terms that work best for your business.
• Quick finance. As money is needed fast in order to remove pressing business debts, the loan amount, once approved, will be in your account in a short amount of time. Just how quickly varies between lenders but it can be in as little as one business day.

Business loans you can apply for today

Moula Business Loan

Moula Business Loan

• Borrow up to $250,000
• Flexible lending criteria
• No hidden fees

100% confidential application

Moula Business Loan

An unsecured business loan with online application and no upfront or early repayment fees.

• Interest rate type: Fixed
• Loan security: Unsecured
• Upfront fee: 2% Establishment fee
• Minimum loan amount: $5,000
• Maximum loan amount: $250,000
• Maximum loan term: 2 years

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Name	Product	Min. Loan Amount	Max. Loan Amount	Loan Term	Upfront Fee	Filter Values
Moula Business Loan		$5,000	$250,000	1 to 2 years	2% Establishment fee		A loan of up to $250,000 that can be approved and funded within 24 hours. Available to businesses with 6+ months operating history and $5,000+ monthly sales.	Go to site More Info	Compare	loading Fetching your data...
Zip Business		$10,000	$500,000	6 months to 3 years	No Establishment fee		Borrow up to $500,000 with loan terms of up to 3 years. Flexible weekly, fortnightly and monthly repayment options available with no early repayment fees.	Go to site More Info	Compare	loading Fetching your data...
ebroker Business Loan		$5,000	$5,000,000	1 month to 30 years	$0 application fee		Small business loans available between $5,000 and $5,000,000. Get access to 70+ non-bank lenders on this independent platform.	Enquire now	Compare	loading Fetching your data...
Lumi Unsecured Business Loan		$5,000	$300,000	3 months to 3 years	2.5% establishment fee		Apply for up to $300,000 from Lumi and benefit from short loan terms, no early repayment fees and once approved receive your funds in just one business day.	Go to site More Info	Compare	loading Fetching your data...
Max Funding Unsecured Business Loan		$3,000	$30,000	1 month to 1 year	$0 application fee		An unsecured business loan from $3,000 that offers convenient pre-approval and no early repayment fees.	Go to site More Info	Compare	loading Fetching your data...
Valiant Finance Business Loan Broker		$5,000	$1,000,000	3 months to 5 years	$0 application fee		A Business Lending Specialist from Valiant Finance can give you access to competitive business loans from over 70 lenders. Loans between $5,000 and $1 million are available. Request a call – your loan can be funded in 1 business day.	Enquire now	Compare	loading Fetching your data...
Octet Trade Finance		$200,000	$8,000,000	1 month to 2 years	Transaction fee 2.5%		Access a line of credit to pay suppliers in over 65 countries. Borrow from $200,000 up to $7 million.	Go to site More Info	Compare	loading Fetching your data...
OnDeck Business Loans		$10,000	$250,000	6 months to 2 years	3% of loan amount		Apply for up to $250,000 and receive your approved funds in one business day. Minimum annual turnover of $100,000 and 1 year of trading history required.	Go to site More Info	Compare	loading Fetching your data...
Heritage Bank Fully Drawn Business Loan		$20,000	No maximum amount	1 to 25 years	Application fee is available upon application		Get access to a loan from $20,000 with no maximum limit with Heritage Bank. Loans can be secured by residential and non-residential property and have terms of up to 25 years.	Go to site More Info	Compare	loading Fetching your data...
Prospa Business Loan		$5,000	$300,000	3 months to 3 years	3% origination fee		Small business loans are available from $5,000 - $300,000 on terms of up to 3 years. At least six months trading history and a monthly turnover from $6,000 is necessary.	Go to site More Info	Compare	loading Fetching your data...
Westpac Business Loan		$20,000	$1,000,000	1 to 30 years	$0 application fee		Purchase a new vehicle, equipment or support your cash flow with a business finance solution from Westpac.	Enquire now	Compare	loading Fetching your data...
ANZ Secured Business Loan		$10,000	$10,000,000	Up to 15 years	$600		Benefit from a low rate when you secure this loan with property and/or business assets. Loans from $10,000 available.	Enquire now	Compare	loading Fetching your data...
ANZ Unsecured Business Loan		$10,000	$1,000,000	Up to 15 years	$600		Apply for a loan from $10,000 with no security required and benefit from flexible repayment terms.	Enquire now	Compare	loading Fetching your data...

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Are there any restrictions to be aware of?

There are some restrictions associated with this type of loan, including the following:

• The money must be used on business expenses. Money is only loaned to you on the provision that it will help out your business and its cash flow problems. Therefore, it must only be spent on items such as stock or employee wages, instead of a new car you might have had your eye on.
• Your business may not meet the eligibility criteria. It's important to be aware of the criteria lenders will be looking for, such as how long your business has been operating and its annual cash flow.
• Not all lenders are flexible with repayment terms. This is something to keep in mind before you apply as you don't want to be hit with a late repayment fee if another lender is offering more flexible terms.

Is a working capital loan right for you?

Here are a few things to consider when deciding whether a working capital loan is the right credit option for your business.

• Can my business afford this loan? It's important to consider whether your business will be able to afford to pay off the loan once it's been approved.
• Secured or unsecured loan. You can choose between a secured or unsecured loan. It depends whether or not you want to put an asset such as your car, home or a business asset, against the loan you apply for, or take on more risk and go for an unsecured loan.
• Is there a flexible repayment option? Make sure there is a flexible repayment option that will be manageable against the ebbs and flows of your business' cashflow.
• What are my options? As working capital finance comes in a variety of options, such as a cash overdraft, a personal loan or discounted invoices, it's important to figure out which will work best for your business and its needs.

Is your business eligible?

Here are some criteria to keep in mind while determining whether or not your business is eligible. In order to apply for working capital finance, you must:

• be a registered business in Australia
• meet the turnover requirements set by the lender
• meet the minimum operating terms set by the lender, and
• be able to make your repayments under the terms you have agreed.

As long as you can meet these requirements, finding a working capital loan that suits the needs of your business becomes a lot easier.

Working capital finance alternative

If your business has outstanding invoices, then invoice financing could be an option to manage cash flow. It's a type of business loan that is secured by the unpaid invoices. It comes with reduced risk, no asset requirements or interest payments.

Compare invoice financing products below.

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Name	Product	Min. Loan Amount	Max. Loan Amount	Loan Term	Upfront Fee	Filter Values
Timelio Invoice Finance		$10,000	$100,000,000	Up to 4 months	$0		Get up to 100% of the value of your invoices without having to wait for customer payments, and with no minimum turnover or operating history required.	Go to site More Info	Compare	loading Fetching your data...
ScotPac Invoice Finance		$10,000	$150,000,000	From 1 year	No set amount		Improve your business cash flow by financing your outstanding invoices. No minimum trading history required, but minimum 12 - month term and $10,000 in invoices.	Go to site More Info	Compare	loading Fetching your data...
ScotPac Selective Invoice Finance		$10,000	$1,000,000	1 to 3 months	$500		Finance your unpaid invoices on demand with terms of 1 - 3 months. 95% of invoice is paid upfront, with no minimum trading history required.	Go to site More Info	Compare	loading Fetching your data...
Octet Invoice Finance		$100,000	$10,000,000	1 month to 2 years	No Set Amount		Convert up to 85% of your company's receivables into cash flow. The value of your receivables need to be worth at least $250,000 to be eligible.	Go to site More Info	Compare	loading Fetching your data...

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Frequently asked questions

• How much can I borrow?

  This varies from lender to lender. However, as lenders are dealing with a business rather than an individual, the amounts you can borrow are generally much higher, up to $250,000.

• What is the typical loan term?

  The typical loan term for a working capital loan is 1 to 18 months. This allows your business to effectively gather the funds to pay off the loan.

• How is interest charged?

  Interest is charged in one of two ways. The first is the standard method, where you receive a rate when you take out the loan, and that rate is applied to the amount you borrow. Alternatively, the interest rate you receive can be based on the risk your lender is taking by loaning you the money; this is called "risk-based pricing".

• What are the alternatives to working capital loans?

  Depending on the amount of finance you need, you can apply for a bank overdraft, ask for discounted invoices from your suppliers, apply for a credit card or take out a personal loan.