Cashflow Lending in Australia: Compare Lenders

Cashflow lending is a broad term for business finance where a lender’s assessment centres mainly on a business’s trading income and cash flow, rather than mainly on property offered as security. Features, structure and requirements differ between lenders and depend on each lender’s current policy. Business Loan Store, an Australian business-finance marketplace and not a lender, compares cashflow finance from verified lenders.

Wondering whether cashflow finance could work for your business? See if you qualify.

What is cashflow lending?

Cashflow lending generally describes business finance where the lender focuses mainly on the money a business earns from trading and how steadily it comes in, rather than mainly on property offered as security. The lender’s assessment tends to start with what the business does rather than what it owns: its sales, its bank activity and its ability to keep up repayments from income.

That focus on income is why the term often comes up when owners compare finance options that do not lean on real estate. There is no single standard product. Each lender designs its own features, structure and requirements, and those depend on its current policy. Any lender-specific details shown on Business Loan Store come only from that lender’s own published material.

For plain-language government information on business finance and funding, including the different ways businesses raise money, business.gov.au is a helpful starting point.

How do businesses commonly use cashflow finance?

Businesses most often look at cashflow finance to bridge the gap between money going out and money coming in. Typical situations include paying suppliers before customers have paid their invoices, buying stock ahead of a busy trading period, and managing seasonal swings in trade.

To picture it in general terms:

• a wholesaler might need to pay for a large order well before its retail customers pay for the goods
• a café might trade strongly in summer and slow down in winter, while rent and wages stay the same
• a trades business might finish a big job and still be waiting on payment while the next job needs materials

Borrowing is not automatically the answer in these situations, and whether it makes sense depends on each business’s circumstances. Moneysmart offers general guidance on borrowing, managing debt and weighing up whether a loan is affordable.

How does cashflow lending generally work?

The process usually follows a familiar path, although the detail varies from lender to lender.

1. Identify the need. The business works out what the money is for and how repayments would fit around its income.
2. Compare options. Business Loan Store lets a business compare cashflow finance and other business finance from verified lenders side by side.
3. Prepare information. Lenders usually ask for details about trading and finances, and the exact list depends on each lender’s policy.
4. The lender’s assessment. The lender reviews the application against its own criteria and decides whether to make an offer.
5. Review any offer. If an offer is made, reading the contract terms and the total cost before signing is an important step.

How does cashflow lending compare with other business finance?

Cashflow finance is one of several categories of business finance, and the main difference between them is what the lender looks at or links the finance to. Business Loan Store compares business loans, cashflow finance, invoice finance, equipment finance and commercial property loans.

The table below gives a plain-language overview based on general government information on business finance.

Type of finance	What it is generally linked to
Cashflow finance	The business’s trading income and cash flow
Invoice finance	Unpaid invoices owed to the business by its customers
Equipment finance	The vehicle, machinery or equipment being bought
Commercial property loans	Commercial property, either being bought or offered as security
Business loans (general)	A broad category, with structure and security varying by lender

These are general descriptions only, and how any product is set up depends on each lender’s current policy, so the fit comes down to what the finance is for.

What do lenders generally look at?

In general, lenders want to understand how a business trades and whether its income can support repayments. Items commonly considered include:

• how long the business has been trading and how stable that trading has been
• activity in the business bank account, such as regular deposits and how the balance moves
• the business’s overall financial position, including existing debts and commitments
• whether tax and reporting obligations are up to date

Exact criteria differ between lenders and depend on each lender’s policy, so the same business may be viewed differently by different lenders. Keeping business tax lodgements and reporting obligations current is part of sound financial management, and the ATO publishes guidance for businesses on what is required.

Any outcome rests on the lender’s assessment of the full application, and no comparison or matching process can decide that on the lender’s behalf.

Who can cashflow lending suit, and when is it not the answer?

Cashflow lending can suit businesses with steady, demonstrable trading income that want finance assessed on that income rather than on property. It also tends to come up where the need is tied to a timing gap, such as stock purchases or supplier payments.

It is not always the answer, though:

• When the pressure is a tax debt. The ATO has its own options for businesses that are struggling to pay, including payment plans, and these may be enough on their own.
• When shortfalls are ongoing. If cash runs short every month rather than at certain times, adding debt may increase strain, and Moneysmart has information on managing debt and free financial counselling.
• When property is available and borrowing against it is acceptable. Asset-based finance may be worth comparing too, as explained in our guide to cash flow lending vs asset lending.

These are general points only, not a recommendation for any particular business.

Questions to consider before comparing cashflow finance

Before comparing offers, it helps to be clear on the full cost and how repayments would fit the business’s cash cycle. Useful questions include:

• What is the total cost of borrowing over the life of the finance, counting every cost the lender discloses?
• How are repayments structured, and does their timing line up with when the business gets paid?
• Is the interest charge fixed or variable? Interest rates across the economy are influenced by the Reserve Bank’s cash rate, which the RBA publishes.
• What happens if the business wants to repay early or needs to change the arrangement?
• What security, guarantees or personal obligations, if any, does the lender require?

Moneysmart and business.gov.au both publish general information on understanding and comparing loans, which can help when reading through the terms of different offers.

How Business Loan Store helps you compare cashflow lending

Business Loan Store is an Australian business-finance marketplace offering comparison, lender discovery and a Help Centre, and it does not lend money itself. The site is owned by U Collective Group Pty Ltd, ABN 18 694 322 159.

For cashflow lending, the platform lets a business compare cashflow finance alongside other business finance from verified lenders, or be matched with lenders whose criteria may fit its circumstances. Because Business Loan Store is not a lender, any decision on an application sits with the lender.

By default, results are listed alphabetically by lender, and no lender pays to appear or to be placed higher. Details about third-party lenders come only from each lender’s own published material. Questions can be sent through the website form, Monday to Friday, 9am to 5pm AEST.

Ready to explore cashflow finance?

If cashflow finance looks worth exploring, the next step is to start your application and tell us a little about how your business trades and what the money is for. It helps to have your ABN, a rough idea of how much you are looking to borrow and some recent business bank statements on hand, and it only takes a few minutes to start. Eligibility depends on the lender’s assessment.

No obligation. Eligibility is subject to assessment.

This is general information only and does not take into account your objectives, financial situation or needs. All applications are subject to lending criteria, assessment and approval.