When one invoice holds up everything
Most businesses can absorb a slow payer or two. The problem comes when a big customer, often your biggest, stretches its terms. Thirty days becomes sixty, sixty becomes ninety. Sometimes it is a payment run delay, a disputed claim, a change of accounts staff or a customer quietly managing its own cash flow at your expense. Sometimes it is a head contractor holding payments until it is paid.
The invoice is real and the money is coming, but your costs do not wait. Wages, super, supplier accounts, rent, BAS and loan repayments all fall due on schedule. A large overdue debtor can turn a profitable business into one that is suddenly short of cash, and that shortage can quickly spread to other relationships. See how this unfolds on avoiding a business crisis.
Your options, compared
| Option | The catch |
|---|---|
| Wait it out | Your own bills go unpaid and suppliers and staff feel it |
| Push the customer harder | Risks the relationship with your biggest client |
| Bank overdraft increase | Commonly slow to approve and limited by your financials |
| Invoice finance | Advances only part of the invoice, often wants control of your ledger and may contact the customer |
| Unsecured cash flow loan | Smaller amounts, frequent repayments, credit-driven decisions |
| Short-term secured loan | Needs property security and a clear exit, which the overdue invoice often provides |
How Equity Tap bridges a late payment
Equity Tap lends from $50k to $5m for one to twelve months, secured by a first mortgage, second mortgage or caveat over residential or commercial property anywhere in Australia. The loan covers the cash gap; the overdue payment, when it lands, repays it. Receivables are one of the most common exits we see.
Because we lend against property, not your ledger:
- Your customer never hears from us. There is no notice of assignment and no one chasing your client.
- The amount is not limited to a portion of one invoice.
- Your existing first mortgage can stay where it is with a second mortgage, with the first lender's consent where needed.
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 while you wait for the customer. Interest is not waived. Each loan is priced on your individual circumstances, aiming for the sharpest rate available for that situation, with the full cost shown before you proceed.
Why we can move quickly
We do not need tax returns, BAS, profit and loss statements, an accountant's letter or bank statements for a property-secured loan. We do not order a valuation before approval. No credit check is made at initial assessment, and if the late payment has already caused a missed payment or default on your file, that is not automatically a problem. Conditional approval can often be given on the phone, a term sheet issued in about 30 minutes, and eligible loans can settle in as little as 24 hours. There is no credit committee.
What to bring to the first call
- The overdue invoices or payment claims and who owes them
- Any correspondence about when payment is expected
- What you need to pay now: wages, suppliers, tax or other costs
- The property you can offer as security and any existing mortgage
- ID for borrowers and guarantors
Plan for "later than late"
A customer who is late once can be late again. When we set the term, we look at how reliable the payment is and build in time. Terms run up to twelve months. A sensible plan also has a fallback, such as other receivables, business cash flow over the term or a refinance. We are an ethical lender, so we make sure you fully understand the loan, the costs and the exit before you proceed. Our guide to exit strategies explains why this matters.
For example, a labour hire business whose largest client has moved to 120-day payment terms without warning might take a four-month second mortgage over the owner's investment property to cover two payroll cycles and super, then repay it once the client's backlog of invoices is paid.
Related scenarios
If the late payment is on a contract you are still delivering, see large contract upfront costs. If the money you are waiting on is an insurance claim rather than a customer, see insurance payout delay. And if a cash flow lender has already said no, read declined by a cash flow lender.
Brokers
Clients with a large overdue debtor often need a quick, quiet solution that does not involve their customer. Send the scenario through our broker page for a fast indicative answer.
Do not let their cash flow become your problem
Apply online or call 1300 123 024. Tell us who owes you, how much you need and when it is expected.
Business-purpose lending only. Approval, timing and terms depend on the scenario.
Frequently asked questions
My biggest customer is 90 days late. Can you lend against what they owe me?
Will you contact my customer?
Is this the same as invoice finance?
The late payment has caused me to miss a payment elsewhere. Is that a problem?
Do I need to make payments while I wait for the customer?
What if they still don't pay?
Brokers: send the scenario through the Equity Tap broker channel and you will deal with the same lending team.