Cafe Working Capital in the First 90 Days After You Take Over
Cafe Cashflow After Takeover 2026 | Switchboard Finance
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Cafe Cashflow · Line of Credit · Handover
Cafe Working Capital in the First 90 Days After You Take Over
The first three months after settling on a cafe are not a trading curve, they are a cashflow gap. Supplier terms reset to a new ABN, the BAS cycle realigns, and the stocking float lands in week one. Here is how a revolving facility is sized for that window.
Quick Answer
The handover window after settlement on a cafe usually opens a cashflow gap as supplier terms reset and the BAS cycle realigns under a new ABN. A revolving business line of credit sized to that window absorbs the dip without locking the new owner into a fixed term loan from day one.
What the first 90 days actually looks like
Picture a buyer who settled on a 60-seat suburban cafe last Tuesday. The asset finance for the espresso machine and undercounter fridges is sorted, the goodwill and fitout were buyer-funded, and the lease assignment came through with a fortnight to spare. Then opening week arrives and three things hit at once.
The coffee roaster wants cash on delivery for the first month because the supplier account is in a new ABN. The wholesale baker has put the new owner on a 7-day pre-paid trial. And the previous operator's final BAS instalment, which the buyer is contractually carrying, lands inside the first 30 days. None of these are surprises, but they all draw on the same working capital pot at the same time.
This is the handover cashflow gap. It is structural, not poor planning. Where this commonly lands is between settlement and the third BAS lodgement under the new ABN, when supplier confidence is still being earned and the new cashflow rhythm has not yet stabilised.
The handover cashflow gap, week by week
The pattern is consistent enough across cafe acquisitions to map out as a sequence. The first week is dominated by the stocking float and supplier deposits. Weeks 2 through 6 are typically the widest part of the gap, when COD terms and BAS overhang stack against takings that have not yet recovered from the changeover dip. Weeks 7 through 12 are the rebuild, as supplier terms shift back toward 14 or 30 days and the new BAS position settles.
Open the supplier accounts, hold the facility
New ABN registered on every key supplier file, COD windows kept short. Stocking float pre-funded from buyer equity so the line of credit opens on day one but stays undrawn. Casual roster trimmed while regulars get used to the changeover.
First invoices come due, first draws begin
Supplier invoices from week one land on the new ABN. Bookkeeper handover ideally complete so the first BAS prep is clean. Facility drawn progressively to cover supplier gaps, not pre-loaded.
Takings stabilise, supplier terms reset
Trading rhythm beds in once regulars adjust to the new operator. Supplier accounts with a clean first month often shift back toward 14 or 30 day terms, releasing the cash pressure that anchored the first month draws. Facility partially drawn with visible headroom.
First BAS lodged, the new pattern is the file
First full quarter of BAS lodged on time, which becomes the first piece of credit history the new operator owns. Facility usage normalised against the BAS month. The gap is closed when draw frequency starts following supplier cycles rather than scrambling against them.
The faster path is not about getting lucky, it is about sizing the facility correctly and timing the draws. Every cafe handover I have helped fund settles into a recognisable shape inside the first 90 days, even when the venue itself is unusual.
Why a revolving facility fits the handover window
A revolving facility, which means a business line of credit, charges interest only on the balance drawn at any given moment. That structure matches the handover cashflow gap because the gap itself is uneven. A fixed term working capital loan charges interest on the full principal from day one regardless of whether the cash is needed yet, which is a poor match for a profile that peaks in week three and tapers by week ten.
The size of the facility is anchored on the seller's recent BAS revenue, the buyer's expected supplier-terms reset, and a stocking float that varies by venue. Most lenders sizing a cafe line of credit will look at trailing 12 months of working capital demand on the seller's books, then layer the handover overhang on top. The numerical anchor is the trading pattern, not a percentage of asset value.
Sequencing the facility against the acquisition
The facility almost always needs to be approved in principle before settlement and formally drawn afterwards. Lenders want to see the new ABN active, the assignment of lease registered, and an opening BAS-cycle position under the new ownership before they release funds. That gives roughly a fortnight between contract exchange and facility availability for the paperwork to catch up.
Practically, that means the conversation with a broker happens at the same time as the conversation with the cafe broker. Asset finance for the equipment moves on one timeline; the line of credit moves on a parallel timeline that finishes a beat later. A cafe loan pack assembled once and shared across both pathways saves the buyer rebuilding the same evidence twice.
Sitting alongside the handover window, the Federal Budget's permanent $20,000 instant asset write-off from 1 July 2026 changes how new owners think about equipment refresh inside the 90-day window, but it does not change the working capital question. The line of credit covers operations; the chattel mortgage covers the equipment. They are different lanes that travel in the same convoy.
For a deeper comparison between the two products on either side of this question, the existing cafe line of credit versus working capital loan guide sits alongside this post. From the underwriter's perspective the post-handover transition is the situation that most often justifies the revolving structure over the term loan.
The first 90 days after taking over a cafe are a working capital problem, not a trading problem. A revolving facility sized to the handover cashflow gap, drawn progressively as supplier terms reset and the BAS cycle realigns under a new ABN, absorbs the dip without locking the new owner into a fixed schedule from day one. Sequence the facility approval alongside the acquisition finance so it is sitting ready in the trading account when handover week starts.
Key takeaway: size the line of credit to the handover gap, not the asset value, and have it approved before settlement so the new owner can draw progressively rather than all at once.Frequently Asked Questions
Funding a cafe in the first 90 days after buying it usually means sizing a revolving facility to the handover cashflow gap rather than taking out a fixed term loan. A business line of credit lets the new owner draw down for stocking, wages and supplier deposits in the early weeks, then pay it back down as trading rhythm returns.
The size is anchored on the seller's recent BAS revenue and the new owner's expected supplier-terms reset, not a generic asset value. Where this commonly lands is a facility that gets drawn progressively from week two and is largely repaid by the start of the second BAS quarter.
A handover cashflow gap is the working capital shortfall that opens up in the first weeks after a cafe changes hands, when suppliers reset terms to cash on delivery for a new ABN, deposits are required again, and BAS instalments still fall due on the seller's timetable.
It typically sits widest in weeks 2 through 6 and varies by venue. A revolving facility sized to that window absorbs the dip without committing the new owner to a fixed loan structure that does not match the underlying shape of the cash demand.
Using a line of credit rather than a working capital loan for a cafe handover usually fits because the cash demand is uneven and short-dated, while a fixed working capital loan locks the borrower into a schedule from day one. With a revolving facility you only pay interest on what you draw, which matches the way handover costs actually land.
The full comparison between the two products is covered in the existing cafe line of credit versus working capital loan guide, which walks through how the structures behave once trading stabilises.
Setting up a line of credit for a cafe acquisition typically takes longer than the asset finance side of the deal because lenders want to see the new ABN, the assignment of lease, and an opening BAS position before they finalise the limit.
Where this commonly lands is a facility approved in principle before settlement and formally drawn after the first BAS cycle under the new ownership. Speaking to a broker early, ideally alongside the asset finance conversation, makes sure the facility is sitting ready when the takeover week begins rather than chasing the deal afterwards.
Drawing on a line of credit before settlement is generally not possible because the facility is conditional on the borrower being the registered operator with an active ABN and a BAS history under the new ownership. Most lenders will only release funds after the change of ownership is recorded.
For pre-settlement deposits and stocking, plan to fund those from buyer equity and use the line of credit to refill working capital in the weeks after takeover. That sequencing matches the way the lender expects the cash to move and avoids facility availability becoming a settlement-week problem.
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