Cash flow in the automotive trade
Automotive businesses spend a lot before they earn. A workshop buys hoists, diagnostic scanners, wheel alignment rigs and tools that need regular upgrading as vehicles change. Panel beaters wait on insurers to approve quotes and pay invoices, while parts, paint and labour are paid up front. Fleet customers want 30 or 60-day accounts. Dealers tie up large sums in vehicles on the lot, and a floorplan limit or a slow month on the yard can leave them with stock but no cash.
The industry is also changing. Hybrid and electric vehicles need new equipment and training. Bigger premises, a second site or buying the workshop down the road can make sense, but only if the money is there when the opportunity is. Add the usual BAS, PAYG and super, and it's easy for a busy automotive business to fall behind.
Common automotive pressure points
- Insurer and fleet accounts paying on long terms
- Expensive diagnostic and workshop equipment
- Used vehicle stock tying up cash on the lot
- Floorplan limits that don't stretch to a good buying opportunity
- Buying a workshop, a dealership or the freehold
- ATO debt from a busy period of growth
Automotive scenarios
| Business | Need | Exit |
|---|---|---|
| Mechanical workshop | New hoists and EV diagnostic equipment | Equipment finance or business cash flow |
| Panel beater | Insurer payments slow, paint supplier on stop | Insurer invoices paid |
| Used car dealer | Chance to buy a parcel of vehicles below market | Sale of the vehicles |
| Tyre and auto electrical | Buying a competitor's business with a short completion | Bank refinance |
| Truck and heavy vehicle workshop | Moving to a larger shed with a fit-out | Refinance once relocated |
| Dealer | ATO debt and supplier arrears after a slow year | Sale of stock or refinance |
| Workshop owner | Buying the freehold from the landlord | Commercial refinance |
These scenarios are examples only. Every loan is assessed on its own facts.
Why banks and cash flow lenders are slow for automotive
Banks want years of financials, tax returns and a clean credit file before they'll fund a workshop purchase or equipment upgrade, and they often treat used car dealing as higher risk. A bank refinance commonly takes up to three months or more, and you may not be approved for the amount you need.
Floorplan financiers only fund approved vehicles within a limit. Equipment financiers only fund the equipment. Cash flow lenders read bank statements full of large parts purchases and irregular insurer payments, and the frequent repayments they take can drain the account that pays your techs.
How Equity Tap lends to automotive businesses
Equity Tap lends $50k to $5m for one to twelve months against residential or commercial property anywhere in Australia, by first mortgage, second mortgage or caveat. The security can be your workshop freehold, your home or an investment property. We don't lend against vehicles or equipment.
We don't need tax returns, BAS, profit and loss or bank statements, and we don't order a valuation before approval. There's no credit check at initial assessment. Defaults, ATO debt or a past decline aren't automatically a problem. See no credit check business loans for how that works.
Interest for up to the first six months can be prepaid or added to the loan, so there are no scheduled payments while the cars sell or the insurer pays. Interest is not waived, and the full cost is shown before you proceed. A dealer buying a parcel of stock might only need the money for two months. That's what the loan is for.
We're business owners ourselves, not bank people. We understand that a dealer with a full yard or a workshop with a long booking sheet is a working business, even if the bank account is low this week.
Typical exits for automotive businesses
- Sale of vehicle stock
- Insurer and fleet account payments
- Equipment finance once the gear is installed
- Bank refinance after a workshop or freehold purchase
- Sale of surplus equipment, vehicles or property
What we need and how it runs
ID, the security property and mortgage details, the purpose and evidence of the exit. For a stock purchase, a list of the vehicles and their expected sale prices helps. For a workshop purchase, the contract and a bank's indicative offer. Call us or have your broker call. Conditional approval can often be given on the phone, with a term sheet in about 30 minutes once we have the scenario. Eligible loans can settle in as little as 24 hours.
Broker note
Automotive clients often need a decision before a buying opportunity disappears. Send the scenario through the broker page. You'll speak with the person making the decision and get a fast indicative answer.
Also see transport and logistics and urgent business loans. Apply online or call 1300 123 024.
Business-purpose lending only. Approval, timing and terms depend on the scenario.
Frequently asked questions
Do you lend against cars on my lot?
Can I borrow to buy a parcel of used cars?
Can you help a panel shop waiting on insurers?
Can I buy my workshop freehold?
Do you check my credit straight away?
Do you need financials?
How fast can I get the money?
Brokers: send the scenario through the Equity Tap broker channel and you will deal with the same lending team.