Insights · Finance · 31 October 2026

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Cash flow finance for small business: overdrafts, lines of credit, invoice finance and more

Sometimes a profitable business needs finance to bridge the gap between paying out and getting paid. The right product depends on why you are short, for how long, and what security you have.

The main options

• Business overdraft: flexible, linked to your transaction account; pay interest only on what you use. Usually needs security.
• Line of credit: similar, often for larger or seasonal needs.
• Invoice finance: borrow against unpaid invoices. Useful when customers pay slowly, but check fees and contract terms.
• Equipment finance: funds the asset so your cash stays in the business: equipment and truck finance.
• Unsecured business loans: fast but usually expensive. Read the true cost, not the weekly repayment.

Before you borrow

• Work out the cause: is it timing (finance can help) or a profit problem (finance makes it worse)? See working capital explained.
• Run a 13-week forecast showing how and when the money is repaid.
• Compare against the ATO's 11.51% interest if you are considering borrowing to clear a tax debt: GIC explained.
• With the cash rate at 4.60%, test repayments at higher rates.

What lenders check

Up-to-date financials and BAS, ATO compliance, a forecast, and security. See getting lender ready.

Quick answers

What is the best finance for a short-term cash gap?

Often an overdraft or line of credit for timing gaps, or invoice finance if slow-paying customers are the cause. Check total fees.

What do lenders want to see?

Current financials and BAS, ATO compliance, a cash flow forecast and security.

Sources

• business.gov.au: Finance and funding
• business.gov.au: Guide to managing cash flow

General information only. This article does not take into account your circumstances and is not tax, legal or financial advice. Rates and rules change; check the sources above and get advice for your business before acting.