The damage was fast. The claim is not.
A fire in the kitchen. A flood through the warehouse. A storm that takes the roof off. A break-in that clears out tools or stock. A machine breakdown that stops production. Whatever the event, a business can lose its ability to trade overnight, and the insurance claim that should put things right moves at its own pace.
Claims involve assessors, quotes, scoping, sometimes loss adjusters and forensic accountants, and back-and-forth over what is covered. Large or complex claims, and claims after widespread events when insurers are flooded with work, can take months. Some policies pay in stages. Business interruption cover may only pay after the loss is calculated. Meanwhile, every week without trading costs customers, staff and momentum.
What business owners need while they wait
- Repairs or rebuilding started before the final settlement figure is agreed
- Replacement stock, tools or equipment to keep serving customers
- Wages to hold on to key staff during the shutdown
- Temporary premises or equipment hire
- Rent, loan repayments and supplier accounts that keep falling due
- An excess or a gap between what is covered and what it costs
Why banks and cash flow lenders struggle here
A business that has just stopped trading looks risky on paper. Recent revenue has dropped, statements look ugly and the future depends on an insurer's decision. A bank facility commonly takes up to three months or more, and bank credit teams do not like lending into uncertainty. Cash flow lenders lend against recent trading, which is exactly what the event has disrupted.
How Equity Tap bridges an insurance claim
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 funds what you need now, and the insurance payout, when it arrives, repays the loan. An insurance payout is one of the exits we see regularly.
Because we lend against property, we do not need tax returns, BAS, profit and loss statements, an accountant's letter or bank statements. A sudden drop in trading does not decide the answer. We do not order a valuation before approval. No credit check is made at initial assessment.
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. That matters when the business is not yet earning. Interest is not waived. Each loan is priced on your individual circumstances, aiming for the sharpest rate available, with the full cost shown before you proceed.
Can the damaged property be the security?
Sometimes. It depends on the extent of the damage and what the property is worth in its current state. Often the better option is another property, such as your home or an investment property, by second mortgage behind the existing loan, with the first lender's consent where needed. See second mortgage business loans and unlocking home equity for business.
How it runs
- Call us with the claim details. The event, the insurer, the claim number, where the claim is up to and any correspondence about amounts or timing.
- Tell us what you need now and the property you can offer as security.
- Get an answer. Conditional approval can often be given on the phone and a term sheet issued in about 30 minutes.
- Sign. We explain the costs and the exit before documents are signed.
- Funds. Eligible loans can settle in as little as 24 hours.
- Repay from the payout, in full or in stages as the insurer pays.
Claim status and how we look at it
| Where the claim is up to | How it affects the loan |
|---|---|
| Accepted, amount agreed, awaiting payment | Strongest exit; term can be short |
| Accepted, amount still being assessed | We look at likely amount and timing and set a buffer |
| Lodged, liability not yet confirmed | We need a solid fallback exit as well as the claim |
| Disputed or declined | Treated like any other loan, relying on other exits |
Be realistic about the timeline
Insurance claims can take longer than anyone expects. We are an ethical lender, so we make sure you fully understand the loan, the costs and the exit before you proceed, including what happens if the claim pays late or pays less. Terms run up to twelve months, and a good plan has a fallback such as business cash flow once trading resumes, a refinance or an asset sale. Read our guide to exit strategies.
For example, a bakery whose ovens and fit-out were damaged in a fire might take a six-month second mortgage over the owners' home to fund replacement equipment and three weeks of wages, reopen while the claim is assessed, and repay the loan from the insurance settlement.
Related scenarios
If the cash gap is caused by a customer rather than an insurer, see debtor paying late. If several pressures are now building at once, see avoiding a business crisis, and for general background read our guide to getting through a cash flow crisis.
Brokers
When a client's business has been hit by an insured event, speed matters for keeping staff and customers. Send the scenario through our broker page for a fast indicative answer from the lending team.
Get back to trading
Apply online or call 1300 123 024 with your claim details.
Business-purpose lending only. Approval, timing and terms depend on the scenario.
Frequently asked questions
Can I get a loan while I wait for my insurance claim to pay?
Does the claim need to be approved first?
Can I use the damaged property as security?
Our trading has dropped since the event. Will that count against us?
Do I have to make repayments before the insurer pays?
What if the insurer pays less than expected?
Brokers: send the scenario through the Equity Tap broker channel and you will deal with the same lending team.