The tradie cash flow trap
Running a trade business means you carry everyone else's delays. The builder pays you when the builder gets paid. The homeowner wants the job finished before they pay the final invoice. The supplier wants their account settled by the 30th. And you have apprentices and a couple of employees who need paying every week, rain or shine.
The result is a business that might be busier than ever and still short of cash. Growth makes it worse: a bigger job means more materials up front, maybe a second ute, maybe extra hands, all before the first invoice is paid. Then the quarterly BAS lands, or a super catch-up, and the account is empty.
Tradies also tend to get caught by ATO debt. It builds quietly over a few quarters when you're flat out and paying everyone else first. By the time the ATO starts chasing, a payment plan alone may not be enough.
How tradies use an Equity Tap loan
- Cover a builder who pays late. Keep paying your team and suppliers while you wait on a 60 or 90-day invoice.
- Take on a bigger contract. Fund materials, gear and labour for a job that pays in stages.
- Clear the ATO. Pay out or reduce tax debt before it turns into garnishee notices or affects your licence. See ATO tax debt loans.
- Buy equipment outright. An excavator, a tipper, a commercial van fit-out or specialist tools without waiting on equipment finance approval.
- Buy out a business partner or buy an established trade business with a client book.
- Consolidate expensive short-term debts that are eating your cash flow every week.
Scenarios we see from tradies
| Trade | Situation | Exit |
|---|---|---|
| Electrical contractor | Owed money by two builders and short for payroll and a supplier account | Builder invoices paid |
| Plumber | Won a multi-unit job needing fixtures and materials up front | Stage payments on the job |
| Concreter | ATO debt and a garnishee threat on the business account | Refinance once lodgements are current |
| Landscaper | Needs a second truck and bobcat before the busy season | Business cash flow over spring and summer |
| Carpenter | Buying out a partner who wants to retire | Refinance to a longer-term lender |
| Painter | Several high-cost short-term loans draining weekly cash | Refinance or sale of an investment property |
These are illustrative examples only. Each loan is assessed on its own scenario.
Why the usual lenders slow tradies down
Banks want two or more years of tax returns, an accountant's letter and a clean credit history. Many tradies run lean books, lodge late or have a default from a bad year. A bank refinance commonly takes up to three months or more, and you may not get the amount you need.
Cash flow lenders are quicker but they read your bank statements. If your income is lumpy, if a builder paid you three months late, or if your account dipped below zero a few times, the amount offered shrinks or disappears. Some will also take daily or weekly debits straight out of your account, which is the last thing a tradie with irregular income needs. If you've been through that, read messed around by a cash flow lender.
Why a property-secured loan suits tradies
Many tradies own a home or an investment property with equity in it. Equity Tap lends against that equity with a first mortgage, a second mortgage behind your current home loan, or a caveat. We don't order a valuation before approval, so you're not stuck at home waiting for a valuer when you should be on site.
We don't need tax returns, BAS, profit and loss or bank statements. There is no credit check at initial assessment, and defaults or ATO debt are not automatically a problem. Interest for up to the first six months can be prepaid or added to the loan, so there are no scheduled payments while the job pays out. Interest is not waived, and you see the full cost before going ahead.
And it is short term on purpose. If you need the money for three months, take it for three months, not a 30-year refinance. Use our equity calculator to get a feel for what your property might support.
Typical exits for trade businesses
- Builder or client invoices paid
- Stage payments from the contract the loan helped you win
- Refinance to a bank once tax and lodgements are up to date
- Sale of surplus equipment, a vehicle or an investment property
- Seasonal cash flow from your busy months
Broker note
Tradie clients often arrive at a broker after a bank decline or a cash flow lender offering far less than they need. Send us the scenario through the broker page: security address, existing mortgage, purpose and exit. We'll give you an indicative answer quickly so you can keep the client and line up the long-term refinance behind us.
Working on bigger commercial projects? See loans for builders. Ready? Apply now or call 1300 123 024.
Business-purpose lending only. Approval, timing and terms depend on the scenario.
Frequently asked questions
I'm a sole trader tradie. Can I still borrow?
Do I need to show my tax returns?
Can you help if I owe the ATO?
Will a valuer need to come to my house?
Can I buy a ute or equipment with this loan?
What if the builder pays later than expected?
How quickly can I get the money?
Brokers: send the scenario through the Equity Tap broker channel and you will deal with the same lending team.