Want terms on your version of this?
Two boxes now, the rest on the form below. No cost, no obligation.
Cash flow problems come in two kinds. The first is timing: the money is coming, but after the bills are due. The second is structural: the business spends more than it earns. A caveat loan solves the first and makes the second worse.
Where it fits
- A $400,000 progress claim is certified and due in six weeks, and wages and subcontractors are due now.
- A supplier offers a large discount for payment on order, and the customer’s purchase order is confirmed.
- A tax instalment falls due a month before a property settles.
- A seasonal business needs to stock up ahead of its peak.
In each case there is a date and an amount on the other side. The loan is sized to the gap, the term covers the date with margin, and the payment repays it.
Where it does not
Where the gap reopens every month, a short secured loan repaid in a lump simply moves the problem forward and adds cost. Signs of a structural shortfall: using the loan to pay ordinary recurring expenses with no specific receipt in view, falling behind on tax and super to fund trading, or a second short-term loan to repay the first. That needs a conversation with an accountant about margins, debtors and costs, and possibly a restructure, not more secured debt against property.
Cheaper tools for ongoing needs
An overdraft or line of credit for day-to-day swings. Invoice finance where debtors are slow. A registered second mortgage over 12 to 24 months for a larger working capital injection that the business will repay over time. See second mortgage vs business overdraft.
Getting it right
Borrow the gap, not a round number. Match the term to the payment date plus a realistic buffer, because debtors pay late. Show the lender the invoice, order or contract. The urgent version of this problem is covered on the urgent working capital page.
We match you with a funder and email you their introduction. Reply to it and they’ll be in touch.
Get matched with a funderFAQ
How fast can cash flow funding settle?
Often within days on a clean file, which is the main reason businesses use a caveat loan for an urgent gap.
Is a caveat loan cheaper than invoice finance?
Not usually over time. Invoice finance and overdrafts suit recurring gaps. A caveat loan suits a single larger gap where speed matters and property equity is available.
What do lenders want to see for a cash flow loan?
The event that repays it: the invoice and the debtor's payment terms, the purchase order, the contract of sale, the refinance approval.