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Differences between cash flow loans and working capital loans in Australia

by OnDeck Australia,   May 03, 2023

If you’re a small business owner in Australia, you know how important it is to have access to financing that can help you manage your cash flow and short-term needs. Two popular options for financing are cash flow loans and working capital loans. While these loans are similar, they serve different purposes and have different terms and conditions. 

What are cash flow loans? 

Cash flow loans are designed to help small businesses cover their day-to-day expenses, such as payroll, rent, and utilities. These expenses are ongoing, and cash flow loans are intended to provide businesses with the working capital they need to keep their operations running smoothly. Repayment terms for cash flow loans may be more flexible than those for working capital loans, as they are intended to cover ongoing expenses. These loans may be secured or unsecured, depending on the lender and the specific terms of the loan. 

What are working capital loans? 

Working capital loans, on the other hand, are used to finance the short-term needs of a business, such as inventory or supplies. These loans have shorter repayment terms, as they are intended to cover specific, one-time needs. Working capital loans are usually unsecured, as they are based on the business’s creditworthiness rather than on collateral. This makes them a good option for businesses that don’t have assets to put up as collateral. 

How do interest rates differ? 

Interest rates for cash flow loans and working capital loans may differ, depending on the lender and the terms of the loan. In general, unsecured loans may have higher interest rates than secured loans. It’s important to carefully consider the interest rates and terms of any loan before making a decision, as this can have a significant impact on your business’s financial health. 

 If you’re considering a cash flow loan or working capital loan, it’s important to work with a lender who understands your needs and can provide you with the financing you need quickly and easily. That’s where OnDeck comes in. OnDeck is a fast, unsecured, and frictionless lender that offers loans from $10,000 to $250,000 in as fast as one business day*. With OnDeck, you can get the financing you need to manage your cash flow and short-term needs without having to put up collateral. Plus, their streamlined application process and personalised service make it easy to get the financing you need when you need it. 


Cash flow and working capital loans FAQ 

What are the eligibility criteria for a working capital loan? 

A business loan is a great short-term solution to poor cash flow in your business. OnDeck offers loans of up to $250,000 to businesses that meet the following criteria: 

  • A minimum business credit score of 500 
  • Have been in business for at least 12 months 
  • No prior or recent bankruptcy 
  • and minimum of $100,000 in gross annual turnover 

You can check your credit score for free without leaving a footprint using our Know Your Score tool. 

What can a business loan be used for? 

Small business owners can use a loan for any business expenditure depending on the type of business they run. Common uses include paying outstanding invoices, covering accounts payable, purchasing new business equipment, covering expenses and day-to-day operations, or just being held to ensure a healthy cash flow while waiting for accounts receivable to come in. 

An unsecured loan from OnDeck is a fast way to boost short-term financial health, giving your business enough cash to continue operating smoothly when there’s a problem with regular income streams. 


This article is for general information purposes only. Content may belong to or have originated from third parties and OnDeck takes no responsibility for the accuracy, validity, reliability, or completeness of any information.
OnDeck is not a financial adviser. You should consider seeking independent legal, financial, taxation or other advice to check how this information relates to your unique circumstances. OnDeck is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by use of this website. 

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