Short answer: How to get a working capital loan comes down to a few basics: an active ABN, a trading history, business bank statements or equity in property, and a clear plan to repay. The lender then assesses the application against its own criteria, and the outcome depends on that assessment.
Key takeaways
- Working capital finance is aimed at everyday costs such as stock, wages and supplier bills, not long-term assets.
- Without property, the cash-flow path needs an active ABN, six or more months of trading and business bank statements shared through a read-only link.
- With owned property, the lender focuses on the equity and on the exit, which is how the loan gets repaid.
- Some cash-flow problems are better handled another way, such as an ATO payment plan for a tax debt.
- The online eligibility check makes no credit enquiry.
What is a working capital loan, and when do businesses use one?
A working capital loan is finance that helps cover the everyday costs of running a business, rather than paying for a long-term asset. Typical uses include buying stock, paying wages, settling supplier bills and bridging the gap between sending an invoice and getting paid.
Cash flow is often the real pressure point. A business can be busy and profitable on paper and still run short in the week a large supplier bill falls due. Working capital finance is designed for that kind of short-term timing problem.
Example only: a café owner has to pay for a large stock order before a busy holiday period, but customer takings will not arrive until afterwards. That gap between paying out and getting paid is the sort of situation working capital finance is generally used for.
It helps to be clear about what it is not. Working capital finance is not a repair for a business that is consistently failing to cover its costs, and we cover that further down. The business.gov.au finance pages give broader context on the funding options available to Australian businesses.
If you are comparing structures, our business finance overview explains how the lending works, and a business line of credit is another structure some owners look into. The details of any product depend on the lender's current policy.
What do lenders look at when you apply for a working capital loan?
Lenders look at whether the business can show it is real, active and able to repay. What they weigh depends on whether the loan is based on cash flow or on property.
Without property (cash-flow lane). The business needs an active ABN, six or more months of trading and business bank statements provided through a read-only link. The loan is then sized to turnover, which means the amount reflects what the business takes in.
With property (property-secured lane). The focus shifts to the equity in owned residential, commercial or industrial property, and to the exit. The exit is simply how the loan gets repaid. Loan amounts in this lane run from $20,000 to $5M.
Credit history. In the property-secured lane, bad credit, defaults and ATO debt are considered, and overdue lodgements do not stop an application from being assessed. That does not mean any particular outcome. It means those issues are not an automatic barrier in that lane. If this is your situation, read our guides on business loans with bad credit and business loans with an ATO debt, or see the bad credit business loans page.
All applications are subject to lending criteria, assessment and approval.
Cash-flow or property-secured: which path does a working capital loan take?
A working capital loan can be arranged on either of two paths. The cash-flow path suits businesses without property, and the property-secured path suits owners of residential, commercial or industrial property. The table sets them side by side using Instant Business Finance's published information.
| Cash-flow lane | Property-secured lane | |
|---|---|---|
| What's needed | Active ABN and six or more months trading | Own residential, commercial or industrial property |
| How it's sized | Sized to turnover | Assessed on equity and the exit; $20,000 to $5M |
| Documents | Business bank statements via a read-only link | No financials or tax returns needed |
| Credit history | Depends on the lender's current policy | Bad credit, defaults and ATO debt considered |
| Indicative timing | Median 24 hours to funds; some funded in as little as 2 hours after approval | Median 36 hours to funds; funded in as little as 24 hours |
Timing figures come from published data and are not a promise for any individual application.
How property-secured loans can be structured. There are three options. The first is a second mortgage. The second is a caveat loan, which is written in Victoria only; everywhere else the loan settles straight onto a registered second mortgage. The third is a first mortgage, available if the property is unencumbered, which is generally the lowest-cost option. You can read more about caveat loans on their own page.
What documents and information should you have ready?
The documents depend on the path. Having them ready tends to keep the conversation with a lender simple, though it does not change the outcome of the lender's assessment.
For the cash-flow path, gather:
- Your active ABN.
- The date your business started trading, so the trading history can be confirmed.
- Access to your business bank statements, which are shared through a read-only link.
A read-only link means the lender can view the statements but cannot move money in the account.
For the property-secured path, gather:
- Details of the property you own.
- An outline of any existing loans on it, since the lender looks at equity.
- A clear explanation of how the loan would be repaid, because the assessment looks at the exit.
Financials and tax returns are not needed in this lane, and that can matter for owners who are behind on paperwork.
For either path, a clear purpose makes any finance conversation easier. Be ready to say what the money is for, such as a stock order or a payroll gap, and how the business expects to repay it. A specific purpose and a believable repayment plan are things any lender will want to understand.
The business.gov.au finance pages also offer general guidance on getting ready for business finance. If you want to test some figures first, try our calculators.
How do you apply for a working capital loan, step by step?
Applying means completing a short online check, providing supporting information and waiting for the lender's assessment. The steps below describe the process Instant Business Finance uses.
- Start the online eligibility check. It takes about 60 seconds, makes no credit enquiry and costs nothing to apply.
- Provide your information. Cash-flow applicants share bank statements through a read-only link. Property-secured applicants provide details of the property.
- Wait for the assessment. The application is assessed against lending criteria. A credit check happens only later, with your consent, if you choose to proceed.
- Funds are released if the loan is approved. Funds follow only when the lender's assessment is complete and the borrower proceeds.
On timing, the published Funding Speed Report covers 5,626 loans funded since 2012. It shows a median of 24 hours to funds for cash-flow loans and 36 hours for property-secured loans, with the quickest on record at 2 hours. These are historical figures and not a prediction for any application. Our guide on how long a business loan takes explains what affects timing.
Your privacy matters during this process. Our consent and privacy policy explains how your information is handled, and the FAQs page answers common questions we hear on the phone.
When is a working capital loan the wrong answer?
A working capital loan is the wrong answer when borrowing would add pressure instead of relieving it. This is general information only, and every business is different.
Ongoing losses. If a business is regularly spending more than it earns, a loan can delay the problem without solving it. Finance suits a short-term timing gap, and a lender will also want to see a realistic way to repay.
A pricing or margin problem. Sometimes what looks like a cash gap is really prices set too low or costs set too high. More borrowing cannot fix that, and a review of pricing and costs may come first.
A tax debt that can be managed directly. Some tax debts can be handled with the ATO itself, for example through a payment plan. The ATO's business pages explain the options. For many owners, speaking to the ATO first is a sensible step to understand before borrowing.
Uncertainty about debt in general. Moneysmart, run by ASIC, offers independent general information on borrowing and managing debt.
A registered accountant or a financial counsellor can also help a business owner work out whether borrowing fits their situation. They can look at the full picture in a way that general information cannot. If a loan still looks relevant afterwards, the eligibility check is there to use.
For general guidance on business finance and tax obligations, see business.gov.au's finance information and the ATO's information for businesses.
Ready to check your eligibility?
Your next step is to check your eligibility, which takes only a few minutes to start. Have your ABN and business bank statements to hand, or your property details if you own property. Whether you qualify depends on the lender's assessment.
Prefer to talk it through? You can call Instant Business Finance, a trading name of Company Cash Pty Ltd (ABN 88 673 762 297), on 1300 863 711, Monday to Friday, 9am to 5pm AEST. Learn more about us too.
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.
Frequently asked questions
How long does it take to get a working capital loan?
It depends on the lender's assessment and the type of loan. Published Instant Business Finance data shows a median of 24 hours to funds for cash-flow loans and 36 hours for property-secured loans, with the quickest on record at 2 hours. These are past results, not a promise for any application.
Can I get a working capital loan with bad credit or ATO debt?
In the property-secured lane, bad credit, defaults and ATO debt are considered, and overdue lodgements do not stop an application being assessed. Outcomes still depend on the equity in the property and the exit, and on the lender's assessment. For the cash-flow lane, the position depends on the lender's current policy.
Do I need to own property to get a working capital loan?
No. The cash-flow lane is for businesses without property. It needs an active ABN, six or more months of trading and business bank statements shared through a read-only link, and the loan is sized to turnover. Owning residential, commercial or industrial property opens the property-secured lane instead.
Does checking my eligibility affect my credit file?
The 60-second online eligibility check makes no credit enquiry and costs nothing to apply. A credit check happens only later, with your consent, if you decide to proceed. You can read more in our consent and privacy policy.
What documents do I need to apply for a working capital loan?
For the cash-flow lane, you need an active ABN, your trading history and business bank statements shared through a read-only link. For the property-secured lane, you need details of the property and a clear explanation of how the loan would be repaid. Financials and tax returns are not needed. 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.
Does it cost anything to apply?
No. There's no cost to apply or check your eligibility. All costs are set out in writing in your loan offer before you sign anything.
Will checking my eligibility affect my credit score?
No. Our 60-second eligibility check doesn't make a credit enquiry. A credit check is only done later, with your consent, if you decide to proceed.
