Surviving the January cash squeeze

For many Australian businesses, December feels busy and January feels empty. Clients close their offices, building sites shut down, accounts payable teams go on leave and decisions wait until February. Meanwhile, rent, wages, leave payments and finance repayments carry on. Add the quarterly BAS that typically follows soon after, and January can be the tightest month of the year.

What causes the squeeze

• Slower sales: many B2B clients and some consumer sectors go quiet.
• Slower payments: invoices issued in December often are not processed until mid-January or later.
• Leave costs: annual leave and leave loading paid over the break.
• Shutdown costs: rent and fixed costs continue while revenue stops.
• The BAS: for quarterly lodgers, the October to December quarter’s BAS is usually due in late February, just as cash is recovering.

Each on its own is manageable. Together, they create a gap that catches out even profitable businesses.

Plan in spring, not in January

The best time to deal with January is October and November, when trading is still strong.

1. Forecast January week by week. Use a 13-week cash flow forecast that runs through February.
2. Collect before the break. Send December invoices early and follow up anything overdue before offices close.
3. Set aside leave and tax money. Move it into a separate account so it is not spent on December stock.
4. Talk to suppliers about January payment timing before they go on leave too.
5. Arrange funding early. A standby facility set up in November is far easier to get than one requested in the middle of January.

Want a person to look at your numbers? The 60-second enquiry runs no credit check, and the person who reads it is the person who calls you back.

Industry patterns

Industry	January pattern
Construction and trades	Sites shut, progress claims delayed, wages and leave continue
Professional services	Clients on leave, billing slows, decisions wait
Wholesale and B2B	Customers closed, orders and payments pause
Retail	Strong December, sharp drop after the sales
Tourism and hospitality	Busy in holiday areas, quiet in cities

An illustrative example

A Brisbane electrical contractor with eight staff shuts down for two weeks from Christmas Eve. December invoices of about $140,000 are spread across builders who reopen in mid-January and pay on 30-day terms. Leave and wages over the break cost about $45,000, and the BAS of $38,000 is due in late February. Without planning, the account bottoms out in early February. With a line of credit arranged in November and December invoices sent on the first of the month, the gap is covered and repaid by March.

If you are already in January

• Prioritise wages, super and tax.
• Call your largest debtors directly, not just their accounts teams.
• Talk to the ATO about a payment plan if the BAS will be a problem; debts of $200,000 or less can usually be arranged online.
• Consider short-term funding if the gap is temporary and the money is clearly coming.

Read our guide to BAS quarter cash planning to make the February BAS less painful next year.

Related reading

• BAS quarter cash planning: A practical routine for planning cash around your quarterly BAS: separating GST and PAYG, forecasting the bill and avoiding last-minute shortfalls.
• Funding a seasonal cash gap: Seasonal cash gaps hit tourism, retail, farming, trades and hospitality. How to forecast the dip, size a line of credit and avoid the usual traps.
• At call business funding: At call business funding means capital you can reach the moment the business needs it. How standby facilities work and how to set one up before you need it.
• 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.
• Funding to cover wages and super: Short of cash for wages or super? Options for covering payroll, payday super from 1 July 2026, and when a line of credit or short loan makes sense.

Words worth knowing

• Line of credit: an approved limit the business can draw, repay and draw again, usually paying interest only on the drawn balance.
• BAS: the business activity statement used to report and pay GST, PAYG withholding and other amounts to the ATO.
• PAYG withholding: tax withheld from wages and other payments, which the business passes on to the ATO.
• Payday super: the requirement from 1 July 2026 for employers to pay super at the same time as wages.

Five things to confirm with any lender

• What will this cost in total, not just per week?
• Are there establishment, line or exit fees?
• Can the term be extended if a sale or refinance is delayed?
• Which assets or properties are being used as security?
• How quickly can the facility be closed if I no longer need it?

Who else to talk to

Funding decisions often have tax, legal or family consequences. Talk to your accountant about how repayments, interest and any asset purchases will be treated, and to a lawyer if property, guarantees or a change of structure are involved. Getting advice before you sign is far cheaper than unwinding a decision afterwards, and it usually makes the application stronger too.

In a nutshell

• Holiday shutdowns slow both sales and customer payments
• Leave, leave loading and wages continue
• The quarterly BAS often lands soon after the break
• Plan in spring and arrange funding before December

How we work through it with you

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.

Is funding the right answer here?

Good borrowing has a job and an end date. Before you enquire, write down in one sentence what the money is for and how it will be repaid. If that sentence is easy to write, you are probably in the right place. If it is not, it is worth a closer look at the business’s cash flow before taking on new repayments.

Before you send the enquiry

You do not need a folder of financial statements to start an enquiry. For most unsecured and property-secured funding, these few items cover the essentials:

• Photo ID for each director or owner.
• Access to your business bank account for a secure statement link.
• Your latest BAS, if it is handy.
• Details of existing finance, including any daily or weekly repayments.
• For property-secured funding, the property address and current loan balance.

Getting the enquiry right

Think of the enquiry as the brief for your funding. A clear brief gets a fast, accurate answer. Give the amount you genuinely need, the revenue your bank statements will show, an honest view of your credit and a straight yes or no on property, and we can match you to the right option on the first attempt.

Get a straight answer

If funding could help, let us know the details. Enquiring runs no credit check, your information stays with one team, and a real person will talk you through what fits. Please answer each question honestly and precisely, particularly the amount, turnover and whether you own real estate, so we can match you properly from the start.