4 Ways to get working capital for your business

August 5th, 2018

Is limited access to working capital holding you back from achieving the growth aspirations you have for your small business? A recent small business survey conducted by Xero found that in any given month, about half of Australian small businesses are cash flow negative, with more money leaving the business than flowing into it.

Years ago, the funding options available to small business owners were relatively limited, with bank loans and capital injections from private investors the most common sources of additional working capital. Today’s small business owner has plenty of choice – but it’s important to select the right working capital solution for your business. The right funding solution for you will depend on how much money you need, how long you need the funds for, and your financial position.

There are many different forms of funding – we explore some of the most popular options below. Read on to learn more about various types of funding and discover whether it might be right for your small business.

 Invoice Finance

Invoice finance (also known as debtor finance) allows you to access funding using your accounts receivable ledger as collateral. These funds can be used for any business-related expenses – from buying new equipment to paying operating costs or unexpected bills.

Whom it’s best for: B2B businesses with cash flow gaps due to slow payment of invoices.

Advantages of invoice finance:

  • Simple application process
  • Great for smoothing cash flow, overcoming cash shortages and providing a sustainable cash flow solution longer term
  • You can access cash as soon as your client invoices are sent

Disadvantages of invoice finance:

  • May only provide you with a percentage of the total invoiced amount
  • Designed to support cash flow rather than as a loan for specific one off purchases

Unsecured Business Loan

An unsecured business loan is a short-term facility that provides funds which can be used for any business-related expenses. No collateral (security) is required which means that interest rates for this type of funding are usually quite high.

Advantages of an unsecured business loan:

  • Simple application process
  • No security required

Disadvantages of unsecured business loan:

  • Higher interest rates with relatively low amounts available
  • Usually requires repayment within 3 to 12 months
  • You may need to provide a personal guarantee

Line of Credit

A line of credit works in a similar way to a credit card – you can use it to pay for any business expenses at any time. With a line of credit, you can access funds up to a certain limit and only pay for the amount of money you use.

Advantages of a line of credit:

  • Simple application process
  • A flexible facility that allows you to access funds as you need them
  • Only pay interest on the amount of money that you use

Disadvantages of a line of credit:

  • Regular payments are required
  • Fees are usually payable regardless of whether the facility is used
  • The entire line of credit is repayable on demand

Business Credit Cards

Credit cards are one of the most common ways for small business owners to access additional funding. If you already hold a business credit card, there’s no application process and you can access funds immediately.

Credit cards are a popular option for meeting short-term needs or making a large once-off purchase, however they’re a high-interest option compared with most other working capital finance options. Before you use your credit card for a funding boost, ensure that you’ll be able to make payment when it’s due – fees for a missed or late payment are particularly high, which will further erode your cash reserves.

Which type of funding is best?

The loan that is best for you will depend entirely on your business's structure and what you need the loan for. For example, if you need help with ongoing cash flow and are a B2B business that invoices their clients for goods or services, invoice finance might suit your needs. If you are the owner of a cafe and you need a new coffee machine, a business credit card might work best.

It's best to consider what it is you'll need the loan for, how much you'll need and which repayment method suits your business the best prior to submitting an application.

What features should I look for in funding options?

Given that there are a number of different means for businesses to obtain cash flow finance, it is important to compare different products carefully and to be realistic about your cash flow needs and your business's ability to make ongoing repayments.

Firstly, eliminate any forms of finance that are not applicable to your situation. For example, if you don't have a significant business asset or property to offer as security, a line of credit will not be a suitable solution. Next, consider whether a one-off cash flow injection such as a business loan is a more suitable option, or if your business would benefit from a ongoing cash flow solution such as a Invoice Finance or line of credit.

 Compare some of these business loan options 


Average Interest Rates

Minimum Trading History





Property / Additional Security

Non- Bank

Unsecured Business Lend


Min 6 months


Max 24 mths



Business Credit Card







Secured Overdraft


Min 24 months





Sale Back - Asset Finance



24 months preferred


Max 60 Months



Bank Unsecured

Business Loan


24 months preferred




Debtor Finance Non Bank







While it’s great that Australian small businesses have lots of choice when it comes to accessing additional working capital, assessing the options to understand how well they fit with your business can be overwhelming.

Earlypay has supported Australian small business with flexible invoice finance and equipment finance solutions for more than 30 years. Call us today on 1300 760 205.

If you'd like to learn how Earlypay's Invoice Finance & Equipment Finance can help you boost your working capital to fund growth or keep on top of day-to-day operations of your business, contact Earlypay's helpful team today on 1300 760 205, visit our sign-up form or contact [email protected].