The practical answer
Working capital helps a business cover the gap between paying for operations and receiving cash from customers. Forecast receipts and obligations before borrowing. A short term secured facility can be appropriate where a specific temporary gap has a credible repayment event; it is not a substitute for a viable ongoing cash flow plan.
What to check in practice
Examples include purchasing stock before a seasonal sales period, paying a supplier ahead of a contracted customer receipt, or completing an acquisition before long-term funding is available. In each case, the relevant question is what event will turn the temporary advance back into cash.
Prepare a weekly cash forecast, not just a monthly profit estimate. Include wages, tax, rent, supplier terms and the loan’s full cost. If the gap is permanent or widening, speak with an accountant before adding secured debt.
Before using property equity
Confirm the genuine business purpose, available property equity, the complete cost of finance and a credible repayment plan. Equity Tap assesses business facilities from $50,000 to $5 million, secured by acceptable Australian real estate, for terms of one to twelve months. Eligibility and timing depend on the full scenario.
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General information only, not legal, tax or financial advice.