Is a Business Line of Credit better than a working capital bridge?

Sometimes—depending on timing and structure. A Business Line of Credit can suit repeatable cycles, while a short-term bridge is often cleaner when you have a single confirmed payout event (like a commercial settlement date).

Can Invoice Finance be used as a “bridge” while waiting to settle?

Yes—if your bridge need is tied to receivables. Invoice Finance can convert unpaid invoices into cash faster, reducing how much you need to borrow during the settlement window.

If the bigger facility is a Term Loan, will bridging hurt the main approval?

It can if the bridge creates new credit noise or missed payments. A well-managed bridge with a clear exit plan is usually fine, but a messy one can complicate how the lender views a Term Loan request.

Should I compare bridge products using the Comparison Rate?

It helps, but for short-term bridging the key is total cost for the weeks you’ll hold it plus the exit rules. The Comparison Rate can still signal hidden fees, but your payout date is the key variable.

Will a short-term bridge reduce my Borrowing Capacity for the bigger deal?

It can temporarily because lenders factor current commitments into servicing. Keep the bridge small, short, and tied to an upcoming payout so Borrowing Capacity isn’t permanently impacted.

Commercial Bridging Loans in Australia (2026): Use a Working Capital Loan While You Wait for Settlement

10 Jan

Written By Nick Lim

Commercial bridging loans in Australia for business owners waiting for settlement | Switchboard Finance

🏢 commercial · timing gaps · 2026 · Business Owners Finance Hub

Commercial Bridging Loans in Australia (2026): Use a Working Capital Loan While You Wait for Settlement

If your bigger commercial loan is approved but Settlement is weeks away, you can still keep the business stable — without pausing payroll, suppliers, or growth.

This is the “bridge” play: use a short-term Working Capital facility to cover the timing gap, then pay it out when the bigger funds land. For the broader system view, see: 5 Cash Flow Warning Signs and Invoice Finance for Growing SMEs.

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When this makes sense:

You have a confirmed incoming event (commercial refinance, sale proceeds, facility increase).
You need the business to stay “flat and stable” for 2–8 weeks (wages, supplier cycles, deposits).
You want one clean short-term solution — not multiple stacked products.

What “bridging” looks like for SMEs (without overcomplicating it)

Most SME “bridging” is just a short-term Business Loan used for a timing gap. The goal is not cheap money — it’s controlled continuity while the bigger deal completes.

If you don’t bridge the gap, the consequence is usually messy Cashflow: late payments, last-minute transfers, and statements that look stressed right when lenders are reviewing them.

Timing gap	What usually breaks	Clean bridge use	What to avoid
Commercial approval done, settlement delayed	Payroll + supplier rhythm	Short-term working capital cover	Multiple new enquiries + stacking
Long-lead equipment deposit due	Cash buffer gets wiped	Bridge deposit then repay at settlement	Paying the deposit and “hoping”
Fitout build period before revenue starts	Outgoings keep running	Bridge the pre-revenue window	Underestimating the timeline
Waiting on a facility uplift	Supplier terms tighten	Bridge the shortfall, then clean exit	Letting bills bounce mid-process

Real-life example: A services SME had a commercial refinance approved, but settlement was pushed out by 5 weeks due to valuation scheduling. They bridged wages and supplier runs with a short-term working capital facility, then paid it out the week settlement landed.

The “pay it out fast” rule (and why cost can still be worth it)

Short-term working capital can be more expensive than long-term commercial debt — that’s normal. The maths can still win if the loan is held for a short time and you can exit cleanly.

This is where Exit Fees matter. Some short-term lenders publicly state there’s no early repayment fee after a minimum period (for example, “after 3 months”). If that’s true for your chosen product, paying more for a short window can be rational — because you’re not locked in for the full term.

Mini checklist before you bridge:

Confirm your expected settlement window (best case + worst case).
Confirm early payout rules and any minimum interest period.
Borrow only what covers the gap (not a “nice-to-have” uplift).
Plan the payout day and keep your statements clean until then.

Simple numbers: If you bridge $80k for ~6 weeks to protect payroll and supplier rhythm, paying higher interest for 6 weeks can beat “breaking the file” (dishonours, missed payments, messy transfers) that can delay or derail the larger settlement.

How to keep the file approval-ready while you bridge

A bridge only works if it keeps the business stable. The lender reviewing your larger transaction is watching for stress patterns — especially last-minute scrambling.

If you use the bridge poorly, the consequence is the opposite of what you want: slower assessment, tighter conditions, or conservative limits. Use the “clean file” approach from: Working Capital Loan Red Flags and Cashflow Facility Docs Checklist.

Bridge rules that keep lenders calm:

Keep payroll/suppliers consistent (no bouncing, no “urgent” micro-loans).
Don’t create extra credit noise while the bigger deal is processing.
Keep the bridge purpose obvious (timing gap, not “general distress”).
Have a written payout plan tied to settlement date.

Real-life example: A wholesaler bridged a deposit and supplier run while waiting for a commercial facility increase. They avoided new credit applications during the window, kept payments consistent, and repaid the bridge within days of settlement.

Summary

If your larger commercial facility is delayed at settlement, a short-term bridge can protect stability — but only if you treat it like a timed exit. The goal is clean continuity, not long-term debt.

Start here: Working Capital Loans (service page) and Business Loans (the broader hub of options). Then tighten your file using: Cash Flow Warning Signs.

Talk to a Broker Check Eligibility