Business Cash Flow Loans

Consider your options for boosting your business' cash flow by comparing loans with Savvy today.

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, updated on July 3rd, 2024       

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Most businesses have times when their normal cash flow falls just short of what’s needed, so it's important to understand the array of options operators have at their disposal. Explore and compare business cash flow loan options with Savvy and find out more about how they work and why they might be right for your business.

What is a business cash flow loan, and how does it work?

Cash flow loans are a type of business investment loan designed to plug a temporary hole or shortfall in your business’ finances. A cash flow loan is based on the understanding that this shortfall will eventually be resolved by the normal cash flow of your business, with no need for extraordinary measures – effectively, you’re borrowing money from your expected future income.

A cash flow loan could be a specialised loan designed specifically to help with business cash flow, and some lenders have dedicated cash flow based lending specifically for this purpose. But in many cases it’s simply a more conventional type of loan obtained for the purpose of helping out with cash flow.

Cash flow loans are generally not intended to be for a large amount of funds. They’re also not intended to be a long-term loan solution going over several years. They're a stop-gap solution to a short-term problem, and are normally intended to be paid of over a matter of months rather than becoming a long-term financial investment.

What types of business finance could act as a cash flow loan?

There are a number of common finance types that could fill the role of a cash flow loan.

  • Specialised “Cash Flow” loans – Some lenders have dedicated cash flow loans custom built and optimised for this purpose. They are generally for lower amounts ($5,000 to around $50,000). They also have relatively short loan terms – around 1-2 years at maximum.
  • Standard Unsecured business loans – Most lenders offer conventional unsecured business loans that could easily serve as cash flow based lending. These don’t require any security or deposit, are fast and easy to turn around, and can provide from $5,000 up to potentially well over $100,000 – although official the maximum amount you can borrow will depend on things like the state of your business and its’ credit history.
  • Invoice Financing – Invoice financing is a kind of alternative loan finance where you transfer a number of your outstanding invoices (representing money owed to your business by customers) over to a lender, who then pays you the majority of their value and then collects the debt from the customer themselves. In some ways, invoice financing is the perfect cash flow loan, as it’s based on bridging the gap between your expenses and getting reimbursed by your customers.
  • Merchant Cash Advance – A merchant cash advance involves a lender loaning you money, and then taking their repayments as a percentage of your cash flow over the next year. They’re also well suited for a cash flow loan, as they’re actually based on the idea of selling your future revenue for immediate finance – that’s literally how they’re defined.
  • Business Credit – Another option for short term finance to plug a cash flow hole is some form of business credit. It’s handy because it’s available at any time and you’re only charged interest for the money you’re currently using. But the interest rates are high, and overusing it can impact your business credit rating.

Types of business loan

Why compare business loans through Savvy?

What might I need a business cash flow loan for?

Frequently asked questions about business cash flow loans

What's the best way to compare different business cash flow loans?

The first step is to decided what kind of loan you’re opting for – Unsecured loans, business credit, and invoice financing work quite differently and it’s not easy to compare them side by side. But once you have a preferred loan type, it’s best to jump online and use a comparison website to quickly and easily compare specific loans and find the best. With Savvy you can compare a range of business loans from top Australian lenders, and quickly find the option that best suits your business.

Do business cash flow loans require security or collateral?

No, you don’t need collateral for a business cash flow loan. Some dedicated cash flow loans have an option of secured or unsecured, and the secured version offers more money and longer loan terms. But it’s not a requirement.

How quick are business cash flow loans to get?

It depends on the type of loan you’ve opted for, but there are a number of options that can be turned around in a matter of days – including some dedicated cash flow loans.

Can I get a cash flow loan if my business has bad credit?

Bad credit can make it harder, but not impossible. If your business is struggling with bad credit making loan approval difficult, there are bad credit cash flow loans available. These are a little more expensive, but they’re available to businesses with poorer-than-average credit ratings.

Do cash flow loans have good interest rates?

Again, it depends on the loan. Business credit and merchant cash advances are rather expensive as loans go. The secured version of a dedicated cash flow loan will probably be quite affordable with low interest rates.

Is there a minimum size that a cash flow loan can be?

There are a number of business cash flow loan options which can be for as little as $5,000. Business credit options often have no bottom limit whatsoever.

Still looking for the right finance for your business?

Explore a range of business loan options suitable to your financing needs and apply online through Savvy today.