What is cash flow lending?

What is cash flow lending?

Could a cash flow loan be the boost your business needs to grow?

Laura Orchard
Laura Orchard 11 Oct 2021 ・ 2 min read

Cash flow is essential for a healthy business, but sometimes you need a little help to keep things moving.

If you need extra cash to grow your business, cash flow lending is one financing option that may be helpful.

We explore how it works and how it differs from traditional business lending.

What is cash flow lending?

Cash flow lending allows you to borrow funds against expected future revenue for business purposes, such as investing in new equipment or temporarily covering wages.

Cash flow loans can be secured by property, however there are options that don't require mortgage security. They can also offer repayment flexibility to suit business needs.

From a line of credit to a term debt facility, cash flow loans come in many shapes and sizes. Speaking with a broker can help you determine which product is right for you.

How does it work?

Lenders typically look at the health of your business to determine if you qualify for a cash flow lending solution.

Cash flow loans are generally suited to businesses that have gaps in their working capital cycle – such as needing to pay for expenses before receiving customer payment.

The amount you can access with a cash flow loan will depend on your business needs and financial circumstances.

How is it different from a business loan?

Cash flow loans typically take the form of an ongoing line of credit or a cash injection from a short-term business loan.

While loans used to provide a cash flow boost are usually shorter than a traditional business loan, line of credit options are often revolving and may be subject to annual review.

How do I apply?

Cash flow lending is becoming more important for businesses – helping owners manage their cash flow cycle or make the most of a new business opportunity.

To learn more about cash flow loans or explore the business financing options available to you, speak with your local Liberty Adviser today.

Laura Orchard
Laura Orchard Author
Laura Orchard is a financial writer at Liberty with over eight years of professional writing experience. She is passionate about simplifying complex concepts to help inspire financial freedom. Laura has a Bachelor of Media and Communications from Deakin University.