- Cash flow gaps can happen even when your business is busy or growing.
- The right funding option depends on what’s causing your cash flow pressure.
- Invoice finance, lines of credit, term loans and equipment finance can help solve different business needs.
- Preparing your information upfront can help make the funding process smoother.
A busy month doesn’t always mean a healthy bank balance.
You might have plenty of work booked in, customers who owe you money, or a new opportunity ready to pursue, but if cash isn’t available when you need it, it can put pressure on your day-to-day operations.
The right funding option can help bridge that gap. But the best solution depends on what’s causing the pressure, how quickly you need funds and what your business is trying to achieve.
Here’s how to match your situation with the right business funding option.
First: What type of cash flow challenge are you solving?
Before looking at finance options, it helps to understand what problem you’re trying to solve. Different types of funding are designed for different situations:
Waiting on customer payments? Invoice finance could help unlock cash tied up in unpaid invoices.
Need flexibility for unexpected expenses? A business line of credit could give you access to funds when you need them.
Planning a specific investment or growth opportunity? A business term loan could provide the upfront funds you need.
Need equipment but want to protect your cash reserves? Equipment finance can help spread the cost of important assets.
Need quick access to funds and have consistent sales? A merchant cash advance may be worth considering.
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Let’s look at each option in more detail.
Need cash while waiting for customers to pay? Consider invoice finance
For many businesses, the work is done before the money arrives.
You might have completed a project, sent an invoice and still be waiting 30, 60 or even 90 days for payment. While that revenue is coming, the bills don’t stop.
Invoice finance allows businesses to access funds tied up in unpaid invoices, helping improve cash flow while waiting for customers to pay.
It can be useful for businesses that:
- Invoice customers after completing work
- Deal with longer payment terms
- Have regular outstanding invoices
- Need more predictable cash flow
👉 Learn more about invoice finance
Need flexibility for unexpected expenses? Consider a business line of credit
Cash flow isn’t always predictable. One month might be strong, while the next brings unexpected costs, slower sales or a timing issue between money coming in and going out.
A business line of credit provides access to funds that you can draw on when needed, rather than receiving one lump sum upfront.
It can be useful for:
- Managing seasonal fluctuations
- Covering short-term expenses
- Paying suppliers
- Handling unexpected costs
- Keeping cash flow steady during quieter periods
The flexibility can be helpful for businesses that don’t need a large amount of funding all at once but could use a buffer for when things change.
👉 Learn more about business lines of credit
Customer story: How a $350k line of credit helped an electrical contractor manage cash flow
An electrical contractor with 14 staff was experiencing cash flow pressure due to the timing gap between completing projects, receiving customer payments and meeting weekly wage obligations.
Valiant helped secure a $350k revolving line of credit, giving the business access to funds when needed, clearing ATO debt and creating a buffer for wages, super and day-to-day expenses.
Need a lump sum for a planned investment? Consider a business term loan
Some expenses are difficult to fund through day-to-day cash flow alone. Taking on a larger contract, hiring new employees, expanding premises or buying stock can all require upfront spending before the return comes in.
A business term loan can provide a lump sum upfront with structured repayments over an agreed period.
It may suit businesses that:
- Have a clear purpose for the funds
- Know how much they need to borrow
- Want predictable repayments
- Are investing in growth rather than covering short-term fluctuations
👉 Learn more about business term loans
Need new equipment without using all your cash? Consider equipment finance
Equipment can be essential for running and growing a business, but paying for it upfront can put pressure on your available cash.
Equipment finance allows businesses to spread the cost of assets over time, helping preserve cash flow for other expenses.
It can be used for assets like:
- Vehicles
- Machinery
- Tools
- Technology
- Business equipment
👉 Learn more about equipment finance
Customer story: How asset finance helped a construction business take on more regional work
A commercial fit-out business needed a specialised caravan to accommodate staff working on regional projects and reduce rising accommodation costs.
With $110k in asset finance, the business was able to purchase the equipment needed to lower project costs and take on more regional opportunities.
Need funding quickly and have regular sales? Consider a merchant cash advance
Some businesses have consistent sales coming in but need access to funds before that revenue arrives. For example, a retailer preparing for a busy season may need to purchase stock upfront, but doesn’t want to wait weeks for sales revenue to build back up.
A merchant cash advance provides funding based on future business sales, with repayments typically linked to future revenue.
It may suit businesses that:
- Have regular card or online sales
- Need short-term access to funds
- Want funding tied to business performance
It’s important to understand how repayments work and whether this option fits your business circumstances before applying.
👉 Learn more about merchant cash advance
What lenders consider before approving funding
Before approving finance, lenders typically look at factors such as:
- Business revenue
- Time in business
- Industry
- Credit history
- Existing financial commitments
- Ability to manage repayments
A strong application isn’t just about needing funds. Lenders also want to understand your business, what the money will be used for and how it supports your plans.
Preparing this information upfront can help you find a funding option that matches your circumstances.
👉 Learn more about what lenders look for before approving your application
FAQs
How quickly can you access business funding?
How quickly you can access funding depends on the type of finance, your circumstances and the lender’s requirements. Having your key information ready can help make the process smoother.
Can I get business funding if my cash flow is tight?
Yes, businesses experiencing cash flow pressure may still be able to access finance. Lenders consider your overall business position, including revenue, financial history and ability to repay.
What is the best funding option for a small business?
The right option depends on why you need funding. Invoice finance may suit businesses waiting on customer payments, while a business loan may be better suited for planned investments or growth.
How much business funding can I get?
The amount you can access depends on factors such as your business revenue, financial position, industry, lender criteria and the purpose of the funding.
Can I reapply if my business loan application was declined?
Yes, you may be able to reapply after a declined business loan application, but it’s worth understanding why your application was unsuccessful first. Common reasons include insufficient cash flow, lender criteria, existing debts or the loan product not matching your circumstances.
Before applying again, review your options, address any issues you can and consider whether a different type of finance may be a better fit for your business.
Find the right funding option for your business
Every business has different cash flow challenges. The right finance option can help you manage today’s needs while continuing to work towards your goals.
Valiant can help you compare funding options from 90+ lenders and find the right solution for your cash flow needs. Get a quote and explore your funding options today.
