Quick answer
Cash flow finance is business lending based on the money flowing through your business rather than on property or other assets. Lenders read your bank statements, look at deposits, balances and existing commitments, and set an amount the account can comfortably repay. It includes unsecured term loans, lines of credit and invoice finance.
Key points
- Based on deposits and account conduct, not property
- Includes term loans, lines of credit and invoice finance
- Amounts usually a share of monthly turnover
- Decisions can be quick when statements verify electronically
Lending on what you earn, not what you own
Traditional business lending was built around security. Borrow against the building, the house, the machinery. Cash flow finance flips that around. If your business brings in steady revenue, that revenue can support a loan even if you own nothing a lender could take. For trading businesses without property, or owners who do not want to put the home on the line, it is often the first place to look.
What your bank statements say about you
Cash flow lenders have become very good at reading accounts, often connecting securely so statements arrive in minutes. Here is what stands out:
| Signal | Reads well | Raises questions |
|---|---|---|
| Deposits | Regular, stable or growing | Falling, or one large customer only |
| Balance | Rarely near zero | Frequently overdrawn |
| Dishonours | None or rare | Several in recent months |
| Other lenders | One or none | Multiple daily debits |
| Tax and super | Regular payments visible | Long gaps with no ATO payments |
Our guide to what lenders see in your bank statements goes through each of these with tips on improving them before you apply.
The main cash flow products
- Unsecured term loans: a lump sum repaid over a set term. See unsecured business loans.
- Lines of credit: a revolving limit for recurring gaps.
- Invoice finance: funding against unpaid invoices for businesses that sell on terms. See invoice finance.
- Revenue-based funding: repayments that move with sales. See revenue-based finance.
Declined by a cash flow lender?
Cash flow lenders run scorecards too, often automated. A decline from one does not mean every door is shut; different lenders weight different signals. The page on being declined by a cash flow lender explains the common triggers and what to do next. If the issue is the size of what you need compared with turnover, property security may bridge the gap, with loans of $20,000 up to $5,000,000.
An illustrative example
An online homewares store has strong sales but buys stock in bulk, which leaves the account thin for weeks after each order. A bank declines because the business is under two years old. A cash flow lender connects to its account, sees steady daily deposits from the online platform and card payments, and offers a facility sized on monthly turnover.
The store uses it to fund stock orders and repays as sales come in. Because the lender based its decision on what the account actually shows, the young business was judged on its trading rather than its age.
Before you apply
Lodge any outstanding BAS, list every existing loan and its repayment, and be ready to explain anything unusual in the statements, such as a one-off large deposit or a quiet month. Then apply once, through someone who knows which lender will read your account favourably.
Submit a short enquiry. Asking needs no credit check, a specialist calls you back, and your data stays with us. Accurate turnover figures help us size the right amount first time. Check your cash flow options.
Frequently asked questions
What do cash flow lenders look at?
Average monthly deposits, the lowest balances, how often the account is overdrawn, dishonoured payments, existing loan repayments and whether tax and super appear to be paid. Credit history is weighed alongside these.
How much can a cash flow lender offer?
It is usually a proportion of monthly turnover rather than a fixed figure. Businesses with higher, steadier deposits generally qualify for more, within a typical range of $5,000 to $500,000.
Why did a cash flow lender decline me?
Common reasons include too many existing loans, frequent overdrawn days, recent dishonours, declining deposits, a short trading history or a recent credit default. Another lender may weigh these differently.
Is cash flow finance the same as a merchant cash advance?
No. A merchant cash advance is one type of revenue-linked funding repaid from card sales. Cash flow finance is the broader category.
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