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Working Capital Loan

A Working Capital Loan is a short-term business loan used to manage day-to-day cashflow, cover operating expenses, stabilise seasonal dips, or fund short bursts of growth. It sits alongside our Business Line of Credit and Invoice Finance solutions as one of the three core pillars of Switchboard’s Business Owners Finance Hub, and is covered in more detail on our Working Capital Loans and Business Loans pages.

Unlike a revolving facility such as a LOC, a Working Capital Loan is typically a term-based cashflow loan with fixed repayments over 3–24 months, often used by SMEs, cafés, tradies, truckers, and medical clinics to bridge short-term gaps.

Why Working Capital Loans Matter

Cashflow swings are normal across small business — especially in hospitality, construction, trade services, freight, and healthcare. A Working Capital Loan helps business owners in the Café Hub, Tradie Hub, Truckie Hub, and Whitecoat Hub smooth out cashflow without needing asset security.

Businesses use these loans to:

  • cover wages and payroll
  • buy stock or materials
  • pay ATO obligations
  • manage supplier invoices
  • fund marketing or short bursts of growth
  • bridge slow months or seasonal downturns

These loans pair well with the Business Cashflow System using LOC + WCL + Invoice Finance together.

How Working Capital Loans Work

  • The lender assesses bank statements and cashflow health.
  • Loan amounts typically range from 10%–30% of monthly revenue.
  • Terms range from 3 to 24 months.
  • Repayments can be daily, weekly, or monthly depending on structure.
  • Security may be unsecured or backed by general PPSR charges.

Interest rates depend on whether the loan uses a Fixed Rate, Variable Rate, and the true comparison shown by the Comparison Rate.

Common Use Cases

  • Unexpected bills or ATO debt
  • Slow customer payments
  • Seasonal downturns
  • Buying stock in bulk for discounts
  • Short-term expansion or emergencies
  • Hiring staff to meet sudden demand

These loans complement other products such as Invoice Finance or refinancing via Asset Refinance.

Related Switchboard Resources

For official business funding guidance, visit business.gov.au.

How fast can a Working Capital Loan be approved?
Same-day approvals are common if bank statements are clean and revenue is stable.
Is a Working Capital Loan unsecured?
Usually yes, though some lenders register a general PPSR security interest.
How much can my business borrow?
Typically 10%–30% of average monthly turnover, with higher amounts possible for secured facilities.