Café Cashflow System: LOC for Stock, Working Capital for Wages, Invoice Finance for Catering (2025)

Café cashflow system for hospitality owners – Switchboard Finance

Insights · Café / Hospitality

For: cafés with supplier + wage + catering cycles

Stock · Payroll · Catering invoices

LOC → WCL → Invoice

Café Cashflow System (2025): LOC for Stock, Working Capital for Wages, Invoice Finance for Catering

Most cafés don’t have a “profit problem” — they have a timing problem.

This is a simple 3-part system to keep Cashflow steady through supplier runs, wage weeks, and slow-paying catering accounts. If you want the café playbook first, start at the Café & Hospitality Finance Hub, then read Café Cashflow Pack — and use this page to stitch the system together.

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Tool	Use it for	Best when	Watch-outs	Pair it with
Line of Credit (LOC)	Supplier runs + “stock spikes” without draining the till.	You’ve got stable trading and predictable supplier rhythm.	Don’t treat it like free money—manage your Credit Limit.	Why Every Café Needs a LOC
Working Capital Loan	Wage weeks, quiet months, seasonal dips.	Payroll pressure hits before revenue lands.	Structure must be safe on Servicing in slow weeks.	Working Capital Loans 2025
Invoice Finance	Catering + B2B invoices you’re waiting 14–60 days to get paid on.	You’re building recurring corporate orders.	It’s tied to your Accounts Receivable, not your vibe.	Invoice Finance 101

Real example: A Melbourne café doing corporate platters twice a week was “busy” but constantly short on cash — supplier bills hit Friday, wages hit Monday, invoices got paid whenever the client felt like it.

1) Stock runs: use a LOC to smooth supplier timing

Stock is where cafés quietly get pinched: you pay suppliers now, but the revenue drips in across the week. A Business Line of Credit is built for that gap — especially when your supplier rhythm is consistent and you’re sick of “buying light” just to survive the next few days.

The goal isn’t bigger orders — it’s calmer operations. If you’re currently stretching Trade Terms or juggling late payments, step back and look at your full café plan in Cash Flow vs Growth.

• Use the LOC for stock spikes (events, weekends, seasonal menus).
• Keep one “rule”: draw for stock, repay as revenue lands.
• Track supplier pressure separately from Accounts Payable chaos.

Real example: A café in VIC stopped doing emergency mid-week top-ups by using the facility for one larger Monday order — less admin, fewer delivery fees, fewer “out of stock” moments.

2) Wage weeks: use working capital to stop payroll whiplash

Wages are the most emotionally expensive bill because it’s people, not just stock. A Working Capital setup is designed to smooth payroll weeks and “quiet stretches” — without forcing you to cut roster quality or panic-discount your menu.

The practical move is building a simple buffer using a Cash Flow Forecast and aligning funding around the exact weeks you get squeezed. If you’re unsure where to start, the Business Loans trio lives here: Business Loans.

• Know your “red weeks”: payroll + rent + supplier timing.
• Size repayments for slow periods, not peak season.
• Keep your BAS cadence in mind so tax doesn’t ambush the plan.

Real example: A café with a winter dip used working capital to keep staffing stable, instead of chopping shifts and watching service quality drop (which always hurts revenue next).

3) Catering invoices: use invoice finance to bridge the “paid later” gap

Catering is great until it turns into “we’re doing $10k/month extra but still broke.” That’s the accounts-receivable delay. Invoice Finance can release cash against invoices so you’re not funding client payment delays with your own overdraft-level stress.

Approvals are usually cleaner when the invoice trail is simple and your trading story is obvious in Bank Statements. If your catering clients are regulars, you can also run this alongside the café-specific comparison: Café LOC vs Working Capital.

• Use invoice finance for B2B/corporate, not walk-in sales.
• Keep a clean process: invoice issued → payment terms → follow-up.
• When you need cash, you Drawdown against the invoice instead of waiting.

Real example: A café doing weekly office catering stopped “floating” supplier bills for 30–45 days by bridging invoices — so they could keep buying stock and paying staff on time.

Summary · Café cashflow system

Three tools. Three timing problems. One calmer café.

Use the trio for what it’s actually good at: Business Line of Credit for stock timing, Working Capital Loans for wage weeks, and Invoice Finance for catering invoices. For the café pathway, anchor this to the Café & Hospitality Finance Hub. For the broader cashflow framework, map it against the Business Owners Finance Hub — then keep a direct path to a money page like Low Doc Asset Finance for equipment upgrades.

Quick example: If your next move is new gear (fridges, espresso machine, prep benches), stack this system first — then read Top 5 Café Equipment Upgrades.

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Café cashflow system — FAQs

What do lenders look at first in the Approval Criteria for a café?

Usually: trading consistency, clean income patterns, and whether the facility fits a real business need (stock timing, wages, or invoices). The easiest starting point is the trio hub: Business Loans.

For a neutral reference on running a business and planning cash, bookmark business.gov.au.

Do I need a formal Loan Agreement if I’m only using the facility “sometimes”?

Yes — even if you draw occasionally, the terms still apply. The smart move is choosing a structure that matches how cafés actually operate. If it’s stock-driven, start here: Business Line of Credit.

How fast can it fund — what does Settlement look like for these products?

Timing varies by lender and your docs, but the goal is removing the “dead time” between needing cash and getting it. If you want a quick filter first: Check Eligibility.

Will I need a Director’s Guarantee for business facilities?

Often, yes — especially for SME facilities. It’s common, but it should be clearly explained and proportionate to the size and purpose of the facility. If you’re mapping the whole plan, start with Business Owners Finance Hub.

Should I judge deals by weekly cost or the Comparison Rate?

Both matter — cafés usually lose when they only optimise one number. The “right” deal is the one that stays comfortable in quiet weeks and still supports growth. If you’re weighing LOC vs working capital, compare here: Café LOC vs Working Capital.