Working Capital - Q & A

Working capital finance is funding that helps a business cover the gap between money going out and money coming in. It is not a traditional loan for an asset or a property. It is liquidity, cash available to pay suppliers, meet payroll, cover tax obligations, and keep trading while you wait for customers to pay. For Australian SMEs, working capital is often the difference between a business that grows and one that stalls, even when revenue is strong.

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Why working capital matters more than most business owners realise

Revenue is not the same as cash. A business can be winning contracts, invoicing well, and still find itself short, because the timing between outgoings and incomings doesn't line up.

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This is the working capital gap. It's not a sign of failure. It's a structural feature of how business works, especially for businesses in manufacturing, wholesale, labour hire, construction, transport, and import/export.

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The most common triggers we see: customers paying within 60 to 90 days (irrespective of trade terms of 14DOI or 30EOM),  while suppliers want payment in 14 to 30 days, seasonal revenue peaks that require stock to be purchased months before income arrives, ATO obligations falling due before debtor payments clear, a new contract or customer order that requires upfront outlay before the first invoice can be raised, and rapid growth that outpaces the cash available to fund it.

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In all of these situations, the business isn't in trouble. The cash flow cycle is just out of sync. The right working capital facility brings it back into alignment.

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What working capital finance options are available?

There is no single working capital product. The right solution depends on the business's requirements, model, the revenue cycle, financial performance and how the gap arises. At Pfitz, we assess each business individually before recommending anything.

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Receivables finance (invoice finance / debtor finance)

A lender advances cash against your outstanding invoices,  typically 80 to 85% of the invoice value within 24 to 48 hours of raising it. The facility is secured against the invoices themselves, not property. Best for: B2B businesses with a spread of debtors within their ledgers and customers on 30- to 90-day terms.

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Trade finance

A lender pays your supplier directly (local or overseas) and gives you up to 120 days to repay once goods have been received and on-sold. Solves the gap between paying for stock and collecting from customers. Best for: importers, wholesalers, manufacturers, food & beverage suppliers, medical suppliers and distributors purchasing stock on short supplier terms; but can be used by a range of other industries.

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Business overdraft or line of credit

A revolving facility that allows the business to draw and repay as needed, up to an agreed limit. Can be secured or unsecured. Best for: businesses with variable cash flow that need flexible, ongoing access to funds.

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Short-term business loans

These are designed specifically to cover cash flow gaps, typically 3 to 24 months, based on revenue and trading history rather than assets. Best for: businesses that need a lump sum to cover a specific gap (e.g tax payments) and prefer a fixed repayment structure.  These loans are often unsecured loans (director guarantees still required) and are more expensive then the over working capital loans because of this. 

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How Pfitz approaches working capital

Most working capital problems have a structural solution. The mistake many business owners make is trying to solve a timing problem with the wrong type of facility — or going to a bank that doesn't understand the business.

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We spend time with every client understanding their cash flow cycle before recommending a product. The structure of the facility matters as much as the rate. A receivables finance facility that unlocks 00,000 in cash flow is a very different outcome from a 00,000 term loan, even if they cost a similar amount on paper.

With 30 years in commercial finance across industries including manufacturing, transport, wholesale, labour hire, construction, Defence and food & beverages, we match businesses to lenders whose credit appetite aligns with their actual situation, not just their balance sheet.

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Real scenario

A labour hire business was growing steadily, new contracts, strong margins, good client relationships. But they were struggling to make payroll on time. Their clients were paying on 30-day terms, but wages went out every week.

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The working capital gap was straightforward: seven days of inflows didn't align with seven days of outflows. Nothing was wrong with the business.

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Pfitz structured a receivables finance facility that advanced 85% of each invoice within 24 hours of it being raised. Weekly payroll was covered from the facility. Clients paid normally, and the facility repaid itself. The business stopped watching its bank account and started taking on new clients.

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What is the difference between working capital and a business loan?

A business loan is typically a fixed amount repaid in instalments over a set term. Working capital finance is usually tied to the business's trading cycle, it draws and repays in line with invoices, supplier payments, or revenue. It is designed to move with the business, not sit as a fixed debt obligation.

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How much working capital can I access?

Receivables finance facilities typically range from a few hundred thousands to hundred million+, depending on the size and quality of your debtor ledger, its is matched against your annualised revenue. Trade finance and short-term facilities vary. The limit is usually based on your trading performance, the strength of your customers, quality off your suppliers and your ATO position,

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Do I need property to secure working capital finance?

Not always. Receivables finance and trade finance are secured against the invoices or trade transactions themselves, not property. This is one of the key reasons these products suit SMEs who have exhausted their property security or don't own residential or commercial real estate.

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Can I get working capital finance if I'm growing fast?

Yes, and fast-growing businesses are often the best candidates. Receivables finance in particular scales with your revenue: the more you invoice, the more funding becomes available. Growth isn't a disqualifier; it's often what makes the facility most valuable.

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How quickly can I access funds?

Once a facility is established, drawdowns can typically be made within 24 to 48 hours of submitting an invoice or purchase order. Setting up a new facility usually takes two to four weeks, depending on the lender and the complexity of the business.

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What if my business has seasonal revenue?

Seasonal cash flow is one of the most common working capital challenges. A revolving receivables finance facility or a structured line of credit can be particularly effective, funding peaks when you need it, and sitting dormant at low cost during quieter periods. Some lenders specifically understand seasonal industries and will structure facilities accordingly.

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My bank has said no, can Pfitz still help?

Often yes. Major bank credit appetite has tightened considerably in recent years, particularly for SMEs without property security or with complex trading structures. Pfitz works with both Bank and Non-bank lenders.  Non-bank lenders offer working capital products that match or exceed what banks provided a decade ago, at competitive rates, with faster approval. Pfitz has access to a broad panel of lenders that most businesses won't find through a standard bank relationship.

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Curious where your own business stands?
The PFITZ Working Capital Assessment is a free 10-minute diagnostic across the four things that actually determine your funding position. Take it, and you'll get a clear Zone reading in return.