Working capital is the oxygen of a business
Working capital is the money that keeps the business running between paying for things and getting paid for them. Stock has to be bought before it is sold. Staff are paid weekly but customers pay monthly or later. A new contract needs materials and labour long before the first invoice is paid. When working capital runs short, even a profitable business can stall.
Most working capital funding on the market is unsecured: an overdraft that the bank won't increase, or a cash flow loan with daily repayments that eats the very capital it was meant to provide. A secured working capital loan is different. Because it is backed by property, it can be larger, longer and gentler on cash flow.
What Equity Tap offers
Equity Tap lends from $50k to $5m for one to twelve months, secured by a first or second mortgage or caveat over Australian residential or commercial property. Repayments are interest only, or interest for up to the first six months can be prepaid or added to the loan so there are no scheduled payments in that period. The principal is repaid at the end of the term from your exit.
Secured vs unsecured working capital
| Unsecured cash flow loan | Bank overdraft | Equity Tap secured working capital | |
|---|---|---|---|
| Size | Usually capped by turnover | Set by the bank, hard to increase | $50k to $5m based on property equity |
| Repayments | Daily or weekly debits | Interest monthly, limit reviewed | Interest only, or none for up to six months |
| Approval basis | Bank statements | Financials and credit history | Property security, purpose and exit |
| Speed | Fast | Slow | Conditional answer often on the phone |
| Bad credit or ATO debt | Often declined | Usually declined | Not automatically a problem |
Read more in our guide to secured vs unsecured business loans and our working capital business loans guide.
What business owners use it for
- Stock. Seasonal buys, bulk discounts, or restocking after a big sales period.
- Contracts. Materials, labour and equipment hire for a job before the client pays.
- Wages and super through a slow period or while waiting for a large debtor.
- Suppliers. Paying suppliers on time to keep terms or win early-payment discounts.
- Growth. A new location, fit-out, hire or marketing push with a clear payback.
- Tax. Clearing an ATO bill so working capital isn't tied up in a payment plan.
An example
For example, an importer that sells most of its stock in the lead-up to Christmas needs to pay overseas suppliers in winter. A six-month secured working capital loan with interest prepaid lets it buy the full order without daily repayments, then repay from sales in summer. No financials are needed for the property-secured loan, and no valuer has to visit the warehouse.
Matching the loan to your cash cycle
The best working capital loan is one whose term matches how long your money is tied up. If stock turns in three months, borrow for three or four. If a contract pays on completion in nine months, borrow for nine or ten. We will talk this through on the first call. If you only need a very short gap covered, look at one-month business loans; if you need no repayments while the cash cycle turns, see no repayments business loans.
What we need, and what we don't
We need:
- ID for borrowers and guarantors.
- The security property address and existing mortgage details.
- What the working capital is for.
- How the loan will be repaid, for example sales, receivables, a refinance or an asset sale.
We don't need tax returns, BAS, profit and loss, an accountant's letter or bank statements for a property-secured loan. We don't order a valuation before approval. There is no credit check at initial assessment.
Working capital when the bank says no
Banks and trade credit providers usually want years of financials and check credit history before extending a limit. A business that has grown quickly, had one tough year or carries some ATO debt often finds its overdraft frozen at exactly the moment it needs more. Bad credit history, defaults, ATO debt or a past decline are not automatically a problem for us, because the loan is secured and assessed on the exit. We handle difficult and complex scenarios that banks and cash flow lenders decline.
Speed
Conditional approval can often be given on the phone and a term sheet issued in about 30 minutes once we have your scenario. Eligible loans can settle in as little as 24 hours, so you can act on a supplier deal or contract before it disappears.
Pricing
Each loan is priced on the client's individual circumstances, aiming for the sharpest rate available for that situation, with the full cost shown before you proceed.
Fund the next stage
If your business has the orders, the customers or the opportunity but not the cash to fund it today, call 1300 123 024 or apply online. You can also estimate your available equity with our equity calculator. Brokers can send scenarios through our broker page.
Business-purpose lending only. Approval, timing and terms depend on the scenario.
Frequently asked questions
What is a secured working capital loan?
Why choose secured over unsecured working capital?
Can I use my home to secure working capital?
Do I need to show bank statements for working capital?
How long should my working capital loan be?
How fast can I access working capital?
Brokers: send the scenario through the Equity Tap broker channel and you will deal with the same lending team.