Getting off daily repayment loans

Daily repayment loans can be useful in a pinch. The trouble starts when they stack. One lender takes $180 a day, another $240, a third $150. Before long, more than $3,000 leaves the account every week before a single supplier is paid, and the business borrows again to fill the hole.

Why the cycle forms

1. A short-term loan with daily debits solves an urgent problem.
2. The daily debits reduce available cash.
3. The next gap arrives sooner.
4. Another short-term loan fills it.
5. Debits multiply, fees accumulate and cash flow gets worse.

Bank statements full of daily debits to several lenders also make other lenders cautious, which narrows the options. See reading your bank statements like a lender.

Step 1: map the stack

Lender	Daily or weekly debit	Payout figure	Early repayment terms
Facility 1
Facility 2
Facility 3
Total

Ask each provider for a written payout figure. Some charge the full agreed cost regardless of early repayment; others reduce it.

Not sure this fits your business? That is exactly what the quick enquiry is for. One team reads it, no credit check runs, and nothing is sold on.

Step 2: stop adding

No new short-term facilities while you sort this out. If a gap appears, talk to suppliers or the ATO about timing instead. Our guide to negotiating with suppliers helps.

Step 3: refinance into one loan

The goal is one repayment that fits the business’s real cash flow, with a clear end date. Options:

• Unsecured consolidation: possible for smaller stacks if trading is strong, though stacked debits make it harder.
• Property-secured refinance: from $20k to $5m, no valuation needed. Interest can be paid up front or capitalised, so there may be no repayments while the business recovers. This is often the most effective route.

The new lender pays out each facility at settlement, so the daily debits stop on the same day. See refinancing expensive debt and consolidating business debts.

Step 4: make sure it sticks

• Build a 13-week cash flow forecast and update it weekly.
• Set up a modest line of credit for genuine short gaps, if needed.
• Fix the cause: pricing, slow debtors, a lost client or seasonality.

An illustrative example

A cafe group has three daily-repayment facilities taking about $520 every business day, roughly $2,600 a week. Payout figures total $142,000. A second mortgage over the owner’s home, with interest capitalised for twelve months, pays out all three. Weekly cash flow improves by $2,600 immediately, and the business uses the breathing room to renegotiate supplier terms and reprice its menu.

What lenders will ask

Expect questions about why each facility was taken out, whether any are in arrears and what has changed in the business. Honest answers help. A lender refinancing stacked short-term debt wants to see that the cycle will not restart, so a forecast and a short explanation of the fix you are making carry real weight.

More on this topic

• Refinancing expensive business debt: Refinance expensive business debt, including stacked daily-repayment loans, into one structured loan with lower weekly repayments and a clear end date.
• Consolidating business debts: Consolidating business debts combines supplier arrears, tax debts, credit cards and loans into one structured repayment. When it helps and when it does not.
• Property-secured business loans: Property-secured business loans from $20k to $5m against residential or commercial property, with no valuation needed and flexible repayment options.
• How to build a 13-week cash flow forecast: A 13-week cash flow forecast shows exactly when cash gets tight. A step-by-step guide to building one from your bank statements and keeping it up to date.
• Reading your bank statements like a lender: What lenders look for in business bank statements: deposits, balances, dishonours, other lenders and owner transfers, and how to present your statements well.

A quick glossary

• Line of credit: an approved limit the business can draw, repay and draw again, usually paying interest only on the drawn balance.
• Second mortgage: a mortgage registered after the home loan already on the title, so it is paid out second if the property sells.
• Capitalised interest: interest that rolls into the balance owing rather than leaving your account each month.

Questions to ask before you sign

• How much lands in my account after any fees are deducted?
• What is the total repayable, and over what period?
• Is the repayment schedule weekly, fortnightly or monthly?
• What property or assets will be secured?
• What are my options if trading dips during the term?

Advice worth getting

Before committing, run the plan past your accountant or bookkeeper. They can check that the amount matches the real need, that the repayments fit your cash flow forecast and that nothing in your tax position will cause a surprise. If property or guarantees are involved, everyone signing should understand what they are agreeing to, and some may want independent legal advice.

Key takeaways

• Stacked daily debits can swallow a business’s cash flow
• Map every facility, payout figure and daily debit
• Stop adding new short-term loans
• Refinance into one structured loan, often property-secured

How Capital At Call handles it

One enquiry, one team, one clear answer. That is the whole approach. We read what you send, call you, ask for the documents that matter and lay out the options in plain English with the total cost attached. Your details are not shopped around, and your credit file is only checked if you choose to accept an offer. If the answer is no, you will hear it quickly and with a reason, so you can plan your next move.

A quick test before you borrow

Ask yourself where the repayment will come from. A customer payment, the next peak season, a property sale or steady trading are all real sources. Hope is not. If you can point to the money that will clear the loan, and roughly when, funding is likely to help. If you cannot, talk to your accountant about the underlying numbers first.

Getting your details together

A little preparation makes the first conversation far more useful, and it means the person who calls you can talk about options rather than chasing basic details:

• Your ABN and the legal name of the business.
• Online banking access, so recent statements can be shared through a secure read-only link.
• A rough figure for monthly turnover and the amount you need.
• A list of current loans and repayments, including any ATO payment plan.
• If property is involved, the address and roughly what is owed on it.

About the questions we ask

Late surprises are what slow funding down. A second property owner nobody mentioned, turnover that is lower in the statements than on the form, an amount that doubles after the first call: each one sends the assessment back to the start. If you tell us the full story at the beginning, even the awkward parts, the file only has to be worked through once.

Put your funding on call

Have a figure in mind? Put it in the enquiry. There is no credit check for asking, you will not be passed around a panel of lenders and you will speak to someone who has read your answers. Take a moment to get those answers right. Accurate details about revenue, time trading and credit mean we can match you properly first time, without the back and forth.