Uneven cash flow can challenge the most profitable small business. There are various options for financing cash flow to help you manage the lean times and achieve your business goals. We’ll run through some of the pros and cons to help you find the best one for you.

Invoice finance 

If you’re owed money but need cash before you’re paid, invoice financing could be the solution.


Invoice financing lets you borrow money using funds you’re owed as security. The lender funds against your outstanding invoices and makes funds available for you to draw when you need them. It’s one of the fastest, easiest and most flexible options for business financing, and generally doesn’t require property as security.


Lenders may require you to provide copies of tax invoices and evidence of work completion. This may result in more administration work than another type of business loan, such as a traditional overdraft. 

Unsecured business loans

An unsecured business loan is a loan for which no asset has been used as security.


You don’t need to provide collateral such as property or equipment to secure the load. Instead, the lender will look closely at your business’s credit history, credit score and how you plan to repay the money.


Lenders are taking a significant risk because they have nothing to fall back on if you default, so these loans generally have a higher interest rate and are relatively small.

Revolving credit

Corporate credit cards, business lines of credit and overdrafts are all forms of revolving credit. They allow you to keep on borrowing without further applications, as long you make your minimum payments on time.


Revolving credit provides flexible cashflow funding for small business. You can borrow up to your credit limit at any time and only pay interest on the outstanding amount.

Corporate credit cards are useful for smaller, everyday business purchases.

Business lines of credit and overdrafts both tend to have higher credit limits. They may also be cheaper than credit cards, particularly when the loan is secured.


Revolving credit makes financial sense if you only use it when you need to and clear the balance as quickly as possible. If you don’t, you could end up paying more in interest than you would with a more structured loan. Your bank can also call in an overdraft at any time.

Financing vehicles and equipment

Ideally your business will have enough cash in reserve to cover at least three months’ expenses. If paying cash for company vehicles or equipment would reduce that reserve, you’re risking your longer-term cash flow. In this case, a business vehicle and equipment loan  or a finance lease could be a better option as it leaves your safety net intact. This means you may not need to apply for other business financing options to get you through a rough patch. Various types of equipment finance loans and leases are available from banks, vendors and dealerships, including  our business car and equipment finance. Different options work better for different industries so it’s worth doing your research.

A cash safety net

Using a business transaction account and  a  business savings or term deposit account  is a great way to make sure you keep some spare cash around in case things change suddenly or your business faces an emergency. 

Professional advice

Cash flow challenges and their solutions vary widely according to the type, size and stage of a business and whether it’s located in a major city, a regional centre or a rural town. A professional adviser can help you make the most cost-effective and appropriate choice.

Accounts and finance options for your business

Resources to help manage your business

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Terms and Conditions

The information contained in this article is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, NAB recommends that you consider whether it is appropriate for your circumstances. NAB recommends that you seek independent legal, financial and taxation advice before acting on any information in this article.