Working capital loans for businesses that are growing faster than their cash

Working capital is the money that keeps a business turning over between one sale and the next. When it is healthy, nobody thinks about it. When it runs short, everything feels harder: suppliers get paid late, discounts are missed, growth stalls because there is no cash to fund the next order. A working capital loan tops up that pool so the business can keep moving at the pace its customers want.

Where working capital actually goes

Think of cash in a business as constantly circulating. It leaves the account to buy stock or pay staff, sits for a while as goods on shelves or work in progress, becomes an invoice once the sale is made, and finally comes back when the customer pays. The time all that takes is your cash conversion cycle:

• Debtor days: the average wait between sending an invoice and seeing the money land.
• Stock days: the average time goods sit on your shelves or in the yard before a sale.
• Creditor days: the average time between receiving a supplier bill and paying it.

Debtor days plus stock days, minus creditor days, equals the number of days your cash is away from the account. Multiply that by your daily costs and you have the working capital the business needs just to stand still. The working capital calculator does the arithmetic for you.

Why growth eats cash

Here is the paradox that catches good businesses out: the faster you grow, the more working capital you need. Every extra sale means more stock bought upfront and more invoices waiting to be paid. If your cash cycle is sixty days and sales grow by a fifth, roughly a fifth more cash needs to be tied up in that cycle, before the extra profit has arrived.

That is why a business can post record sales and still struggle to pay its BAS. Profit is real, but it is sitting in the warehouse and in other people’s accounts payable. Our guide to the working capital cycle works through examples.

How a working capital loan helps

A working capital loan puts cash back into the cycle so the business can fund stock, wages and costs while waiting for customers. It is typically unsecured, from $5k to $500k, and assessed on your bank statements and turnover. Lenders look at how steady deposits are, what other debts already draw on the account, and whether the business shows the strain of a stretched cycle, such as frequent low balances or bounced payments.

You can take working capital funding in two shapes:

Shape	How it works	Best when
Term loan	Lump sum, fixed repayments	A one-off step up, like a bigger contract or new range
Line of credit	Draw and repay as needed	Needs rise and fall through the year

Want a sense of what your business could access? Enquire in about 60 seconds with no credit check to enquire.

Signs your business needs more working capital

• You regularly pay suppliers late even though sales are strong.
• You turn down bulk discounts because the account cannot cover the outlay.
• Payroll week is stressful every time.
• You have stopped quoting bigger jobs because you cannot fund the materials.
• Your overdraft or credit cards are always near the limit.

If two or three of those sound familiar, the problem is probably working capital rather than profit.

Fix the cycle as well as funding it

Funding works best alongside a tighter cycle. A few days cut from debtor days can release a surprising amount of cash. Practical steps include:

• Invoice immediately and make paying easy, with clear terms and payment links.
• Ask for deposits on large or custom orders.
• Reorder smaller and more often to reduce stock days. See stock and inventory cash flow.
• Negotiate supplier terms in exchange for reliability. See negotiating supplier terms.
• Consider invoice finance if most of your cash is sitting in invoices to business customers. See invoice finance.

An illustrative example

An illustrative wholesaler sells to cafes and grocers on 30-day terms, holds about five weeks of stock and pays its own suppliers in 30 days. It wins a new supermarket-chain account that will lift sales noticeably, but the chain pays in 60 days and expects stock levels to rise. The wholesaler’s profit forecast looks excellent, yet its cash cycle has just lengthened and its stock holding grown. A working capital facility sized to the extra cash locked in that cycle lets it take the account without delaying payments to its existing suppliers.

Questions a lender will ask

Expect a few practical questions so the facility can be sized properly: How long do your customers really take to pay? How much stock do you hold, and how quickly does it turn? Which suppliers give you terms, and how long? Is the need permanent because the business has grown, or temporary because of a season or a single contract? Having rough answers ready, even from memory, makes the conversation quick and keeps the facility matched to the real cycle rather than to a guess.

What it costs

Working capital funding is priced on the individual business, so we do not publish rates. Compare offers on the total amount repayable and the repayment pattern, and make sure the repayments suit the timing of your income. The repayment estimator helps you test any quote.

Keep your business moving

If your cash is tied up in growth, stock or slow-paying customers, tell us about it. A 60-second enquiry, no credit check to enquire, no list of lenders getting your details, and a real person reading it. Bring your debtor days and the amount from the calculator if you have them, and answer the form accurately so we can match you properly. Apply now.