Quick answer
A working capital loan is short-term business funding that pays for everyday running costs, such as wages, stock, rent and supplier bills, while you wait for customers to pay. Unsecured working capital is typically $5k to $500k, sized on turnover and recent bank statements, and repaid over months rather than years from the cash the business generates.
Key points
- Pays for running costs while cash is tied up in stock and debtors
- Typically $5k to $500k unsecured, sized on turnover
- Repaid over months from trading income
- A line of credit suits gaps that keep coming back
- Typical amount
- $5k to $500k unsecured
- Main evidence
- Recent business bank statements
- Security
- None needed, property optional
- Best for
- One-off or seasonal cash gaps
Working capital is the money a business needs simply to keep turning over. You pay staff, suppliers and rent before your customers pay you, and the cash stuck in that gap has to come from somewhere. A working capital loan fills it with a fixed sum that is repaid from trading over the following months.
What is a working capital loan, exactly?
It is a short-term business loan for running costs rather than long-life assets. The money lands in your business account and is used for whatever keeps the doors open: payroll, stock, materials, a quarterly BAS, a marketing push before your busy season. Repayments are usually weekly or monthly and come from the same income the loan helped create.
Unsecured working capital loans are typically $5k to $500k. Where the business owns property, a property-secured loan can provide more, from $20k up to $5m, with no valuation needed.
How do lenders decide how much to offer?
The main evidence is your recent business bank statements. An assessor looks for:
- Regular deposits that show the business is trading consistently.
- The size and spread of those deposits, because steady income supports more borrowing than a few lumpy payments.
- Existing repayments, especially daily or weekly debits from other lenders.
- How the balance behaves, including dishonours and long stretches near zero.
Turnover sets the ceiling, but the pattern inside the statements decides where you land under it. That is why two businesses with the same annual revenue can be offered quite different amounts.
Prefer to talk it through? Start with the 60-second enquiry so the first call is about options, not paperwork. No credit check at this stage.
When does working capital funding make sense?
It works best when the gap is temporary and you can see how it closes. Typical examples:
| Situation | Why working capital fits |
|---|---|
| Stocking up before a peak season | Sales in the peak repay the loan |
| A large new contract with 60-day terms | The contract income repays it |
| A tax bill landing in a quiet month | Trading income over the next quarter repays it |
| Covering wages while a big debtor pays late | The debtor’s payment repays it |
It is a poor fit when the business is losing money every month with no turnaround in sight. Borrowing then only delays a harder decision, and we would rather tell you that plainly.
Working capital loan or line of credit?
A fixed loan suits a single, identifiable need. A business line of credit suits gaps that recur, because you draw only what you need and pay mainly for what you use. Many owners end up with both: a modest line for everyday swings and a fixed loan for the occasional big step. Our side-by-side comparison covers the trade-offs in detail.
Sizing it properly
Borrowing too little means coming back in a month. Borrowing too much means paying for money you do not use. Run your figures through the working capital calculator to see how much cash your debtor, stock and supplier days tie up, then add a buffer for the unexpected.
Key takeaways
- Pays for running costs while cash is tied up in stock and debtors
- Typically $5k to $500k unsecured, sized on turnover
- Repaid over months from trading income
- A line of credit suits gaps that keep coming back
How we work through it with you
You send a 60-second enquiry with the amount, the purpose and a few facts about the business. A real person reads it, usually the same business day, and calls to fill in the gaps. For unsecured options they will ask for recent business bank statements, which can normally be shared through a secure read-only link. For property-secured options they will ask about the property and what is owed on it, with no valuation needed. You then see the offer in plain terms, including the total cost, and decide whether to go ahead. A credit check happens only at that point. If something about your situation is unusual, say so early; it is far easier to plan around a known issue than a surprise.
Paperwork worth gathering
A short checklist before you send the enquiry. None of it takes long, and together it heads off the most common causes of delay:
- Know the amount you need and what it will pay for.
- Check your recent bank statements so nothing in them surprises you.
- Note any loans, leases or payment plans the business is carrying.
- If you own property, know who is on the title and what is owed.
- Make sure every director or co-owner knows you are applying.
A quick word on the enquiry form
The enquiry asks for the amount, the purpose, how long you have traded, your monthly revenue, your credit history, your state and whether you own real estate. Each answer steers your enquiry towards the right option. Accurate answers let the first call move straight to solutions. Rounded-up turnover or a credit history that turns out to be different from the form means starting again, which costs everyone time.
Let’s see what fits
When you are ready, tell us what you need. Enquiring costs nothing and there is no credit check; a check only happens if you choose to go ahead with an offer. A real person reads every enquiry and calls you back, and we never auction your details to other lenders. One favour: fill in the form carefully. Honest figures for turnover, time trading and credit history let us match you properly the first time.
Frequently asked questions
What can a working capital loan be used for?
Any genuine running cost of the business: wages and super, rent, stock, materials, supplier accounts, tax instalments and marketing. It is not designed for buying long-life assets, which usually suit equipment finance or a longer loan.
How is the loan amount worked out?
Unsecured working capital is sized mainly on turnover and the pattern in your bank statements: regular deposits, average balances and existing repayments. A business with steady deposits can usually support more than one with large swings, even at the same annual revenue.
How long are working capital loans?
Usually months rather than years. The idea is to match the loan to the cash cycle it is covering, so it is repaid as the stock sells or the debtors pay. Longer terms lower each repayment but increase the total cost.
Should I choose a working capital loan or a line of credit?
If the gap is one-off, such as a big order or a single tax bill, a fixed loan is simple and has a clear end date. If gaps keep recurring through the year, a line of credit you draw and repay is usually cheaper and less work.
Can I get working capital with a patchy credit history?
Often. Lenders weigh recent trading more heavily than old credit marks for this kind of funding. Explain what happened in the enquiry. Property security can also make a big difference.
Ask right here, it takes a minute
The same 60-second enquiry, on this page. No credit check to enquire, and the person who reads it is the person who calls you.