Growing without running out of cash

It sounds like a good problem to have: too much work. But growth is one of the most common reasons healthy businesses get into cash trouble. The orders are real, the profit is real, and the bank account is empty.

Why growth eats cash

Every extra dollar of sales needs cash before it produces any:

• Stock or materials to fulfil the order.
• Staff to do the work, often hired before revenue starts.
• Debtors: the time between invoicing and being paid.
• Equipment and premises to handle the volume.

If your working capital need is 15% of annual sales, growing sales by $1m needs about $150,000 of extra cash, before counting any equipment. Profit from the new sales arrives later.

Warning signs of overtrading

• The bank balance trends down while sales and profit trend up.
• Debtors grow faster than sales.
• You are paying suppliers later and later.
• Wages are paid from an overdraft or short-term loan.
• You are taking on work without checking whether you can fund it.

Any two of these together deserve attention.

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.

Plan growth like a project

Before taking on a step up in work, map the cash:

Question	Why it matters
What costs come first, and when?	Sets the size of the gap
When does the first payment arrive?	Sets how long the gap lasts
What margin does the work carry?	Shows whether it is worth funding
What if the client pays late?	Tests the buffer

The working capital calculator shows how much extra cash a given level of growth needs.

Funding that grows with you

• Invoice finance: grows automatically with your debtor book. Strong fit for B2B growth.
• Line of credit: covers uneven growth-related gaps.
• Working capital loan: funds a defined ramp-up, such as a new contract.
• Property-secured loan: suits larger steps like a second site or acquisition, with interest paid up front or capitalised.

Grow in stages

Hire as work arrives, not all at once. Order stock in tranches. Ask for deposits and progress payments. Each step reduces the peak amount of cash you need. Our pages on taking on a bigger contract and hiring for growth go into the detail.

Know when to say no

Sometimes the right answer is to decline, delay or renegotiate a contract. A big job on thin margins and long terms can leave a business worse off than before. Turning it down can be the profitable decision.

A worked illustration

A packaging supplier growing from $3m to $4m in sales over a year needs roughly an extra $150,000 in working capital if its cycle stays the same. Profit on the extra sales might be $120,000, but most of it arrives late in the year. Without a facility, the business spends the year paying suppliers late and juggling payroll. With invoice finance in place from the start, the growth funds itself as the invoices are raised.

More on this topic

• How much working capital does a business need?: How to work out how much working capital your business needs, using debtor, stock and supplier days, plus a buffer for surprises and growth.
• Funding to take on a bigger contract: Won a bigger contract but need cash for staff, materials and equipment before the first payment? How to fund the ramp-up without overstretching.
• Invoice finance: Invoice finance advances most of the value of unpaid invoices to business customers, so you are not waiting months for cash. How it works and who it suits.
• Funding to hire staff for growth: Need to hire before new revenue arrives? How to fund wages, super and onboarding for new staff, and how to stage hiring so growth does not drain cash.

Key terms, in plain English

• Line of credit: an approved limit the business can draw, repay and draw again, usually paying interest only on the drawn balance.
• Working capital: the cash a business needs to keep running while money is tied up in stock and unpaid invoices.
• Invoice finance: funding that advances part of the value of unpaid invoices owed by business customers.
• Capitalised interest: interest that rolls into the balance owing rather than leaving your account each month.

Check these before you commit

• 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?

Where your accountant fits in

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.

The short version

• More sales mean more cash tied up in stock and debtors
• Profitable growth can still drain the bank account
• Watch debtors, supplier terms and the balance trend
• Use facilities that grow with sales, and stage expansion

What to expect from us

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.

Funding or another fix?

Funding works best when three things are true: the need is specific, it is temporary or it pays for itself, and there is a clear source of repayment. If all three hold, the right loan can take real pressure off the business. If the business is losing money month after month with no change in sight, borrowing only postpones a harder decision, and we would rather say so than arrange a loan that makes things worse.

Getting your details together

Have these within reach and the process moves quickly, because each one answers a question the assessor would otherwise have to come back and ask:

• ABN, business structure and how long you have traded.
• Recent business bank statements, ideally shared online.
• What the money is for and how it will be repaid.
• Any tax debt, default or arrears you should mention up front.
• Contact details for anyone else who would need to sign.

Getting the enquiry right

Every question on the form is there for a reason: it changes which funding fits. Describe the business as it stands today rather than the version you expect in six months. Mention any default, tax debt or recent decline in the notes. We look at those situations all the time, and knowing early lets us head straight for options that can actually work.

Put your funding on call

If this sounds like your business, start the enquiry. It takes about 60 seconds and runs no credit check. Your details are not sprayed across the market; the team that reads your enquiry is the team that works on it. Please give real numbers rather than hopeful ones. A clear picture of turnover, credit history and property lets us point you to the right funding straight away.