Wrap up your cash flow loans into one simple loan

It rarely starts as a plan. A business takes a cash flow loan to cover a slow month. The repayments, debited daily or weekly, make the next month tighter, so another loan covers that. By the third, the account feels like a funnel: money arrives and leaves the same day. Every lender sees the debits and declines the next application, because the account looks overcommitted.

What stacked loans do to a business

The danger is not the number of loans. It is the timing. Several daily or weekly debits mean cash is gone before it can pay wages, suppliers or tax. A single missed customer payment can trigger dishonours and fees, and a cycle of borrowing to repay borrowing. Our guide on why daily repayments choke cash goes into the mechanics.

How consolidation works

1. List every loan. Lender, balance, repayment amount, how often it is debited and the end date.
2. Get payout figures. Ask each lender for a written payout figure, and whether any early repayment terms apply.
3. Borrow once. Company Cash lends $20,000 to $50,000 secured on property or an unencumbered vehicle, with no cash flow evidence and funding in as little as 24 hours once approved.
4. Pay the others out. The old loans are cleared, and the debits stop.
5. Repay one loan. After up to three months of prepaid interest, there is a single weekly repayment.

The prepaid interest period is what makes this practical for a stretched business. For up to three months, nothing is debited for the new loan, so you get a clean run to rebuild cash flow.

When consolidation helps

• Three or more loans are debiting at once.
• Daily repayments are causing overdrawn days or dishonour fees.
• You have been declined for further finance because of the account’s repayments.
• You can see cash flow recovering if the pressure eases.

When it does not

Consolidation only works if the underlying business can service one repayment. If the business loses money every month, consolidation postpones a hard conversation. In that case, speak to an accountant or a financial counsellor, and see our guide on what to do after a decline.

Costs to compare

Do the arithmetic before you borrow:

• the total remaining to be repaid on each existing loan (payout, not the contract total);
• the total cost of the new loan, including fees and the prepaid interest;
• any early repayment terms on existing loans; and
• how the weekly repayment compares with what the old loans cost per week together.

If the new loan is smaller than the sum of the old repayments over the same period, consolidation helps. If not, ask why you are doing it. Sometimes the answer is still “breathing space”, which is valid, but go in knowing.

Talk to your accountant before you consolidate if you can. They can check the payout figures and tell you whether the numbers make sense for the business as a whole.

Protections

Small businesses have some protections against unfair contract terms, explained by ASIC. Also, keep records of your payouts, and ask lenders to confirm in writing when each loan is closed.

A worked example

A hospitality owner has three cash flow loans: $12,000 owing on the first, $15,000 on the second and $9,000 on the third. Combined debits come to over $1,800 a week, which is more than the venue can comfortably carry in a slow month. The owner has a home with plenty of equity. A secured loan of $38,000 pays all three out, with a little left over for fees. There is no weekly debit for up to three months because the interest is prepaid, and afterwards a single weekly repayment replaces three. The figures are illustrative only and are not an offer.

The point of the example is the shape, not the numbers: a stack of competing repayments becomes one, with time to recover first.

Keep the paperwork straight

When the new loan settles, make sure each old lender is paid in full and confirms the account is closed. Cancel any direct debit authorities so a stray debit does not hit the account later, and keep copies of the closing letters. If any lender charges a fee to pay out early, get that figure in writing before settlement so the amount borrowed covers it. These small steps stop surprises and give you a clean record for future finance.

Next step

Gather your payout figures, then start the application form. Pick “up to $50,000” and answer a few questions. We assess every application, and nothing on this page should be read as an offer.