Funding Business Growth Without Running Out of Cash

The Growth Problem Every Business Owner Knows

You’ve got the opportunity to grow. More work. More revenue. More profit.

But here’s the catch: managing cash flow during business expansion is harder than most people expect.

You might land an extra $1 million in work that’ll deliver $100k-$200k in profit. Sounds good, right? Except you won’t see that money for 60 days, and your bills don’t wait that long.

Wages still need paying. Equipment finance is still due. Suppliers still want their money.

Even profitable businesses face cash flow problems when growing because growth is expensive before it’s profitable.

So how do you fund business growth without running out of cash?

Two Things You Need to Get Right

Funding business growth comes down to two critical components: maintaining working capital and managing equipment finance costs. Get these right, and you can expand without constantly worrying about running dry.

Keep Enough Cash in the System

Growth burns through cash faster than most people expect. Even profitable businesses hit the wall if they don’t have enough working capital for business growth to bridge the gap between spending money and getting paid.

The timing problem is simple but brutal: you need to pay wages monthly, cover equipment finance repayments monthly, and keep suppliers happy – all while waiting 60+ days to get paid for the work you’ve just completed.

Here are your main options for cash flow during business expansion:

Overdrafts or Working Capital Loans

Gives you flexibility to cover short-term cash needs when revenue timing doesn’t align with expenses. Not cheap, but keeps you moving when opportunities arise.

These facilities let you draw down funds when needed and pay them back as customer payments come in, providing a buffer during the growth phase.

Debtor Finance (Invoice Finance)

Invoice finance for cash flow is one of the most practical solutions for capital-intensive businesses.

Instead of waiting 60+ days for customers to pay, you can access up to 80% of your invoice value within a day or two of issuing it.

Debtor finance in Australia typically works like this:

• You invoice your customer as normal
• The finance provider advances you 80% within 1-2 days
• Your customer pays the finance provider directly at the end of the payment term
• You receive the remaining 20% (minus fees)

Yes, these options cost money. Yes, they’ll trim your margin slightly. But they keep your business liquid while growth kicks in, and that’s worth paying for.

The alternative – running out of cash during a growth phase – is far more expensive.

Handle the Extra Equipment Finance Costs

New equipment means new monthly repayments. And those repayments start immediately, even though the equipment won’t generate income for months.

This is where many businesses get caught: they can see the profitability of growth, but struggle with how to pay for new equipment while growing without overextending their cash position.

Here’s a practical solution we see work well: refinance equipment loans that are nearing completion.

Refinancing Equipment to Fund Growth

If you’ve got loans that are nearly paid off, you can often rewrite them over a longer term. This drops your monthly payments and creates breathing room for new equipment finance for growth.

Real-world example:

• Current monthly repayments on existing equipment: $45,000
• After refinancing over a longer term: $34,000
• Extra headroom created: $11,000 per month

That $11k can help offset the cost of new equipment finance (say $15k per month) without overextending yourself.

The monthly shortfall of $4k is far easier to manage than finding an extra $15k from existing cash flow.

Making It Work in Practice

Managing cash flow during business expansion requires both strategies working together.

Step 1: Secure Working Capital

Before you commit to growth, make sure you have working capital facilities in place. Whether that’s an overdraft, working capital loan, or debtor finance arrangement, get it sorted before you need it.

Banks and financiers are more willing to help when you’re planning ahead, not when you’re desperate.

Step 2: Audit Your Existing Equipment Finance

Look at your current equipment loans. Which ones are more than halfway through their term? Which assets will stay in your fleet long-term?

These are candidates for refinancing to create monthly cash flow headroom.

Step 3: Calculate Your Growth Funding Gap

Work out exactly how much extra cash you’ll need before the new revenue starts flowing:

• New equipment monthly repayments
• Additional wages for new operators/staff
• Extra running costs (fuel, maintenance, insurance)
• Working capital buffer for the 60-day payment lag

Step 4: Structure Your Finance Properly

Use equipment finance for growth on the new equipment, refinance suitable existing assets to create headroom, and use working capital facilities to cover the timing gap.

This three-pronged approach gives you the best chance of sustainable expansion.

The Bottom Line

Funding business growth doesn’t happen by accident. It needs planning.

Get your working capital sorted. Structure your equipment finance properly. Know which assets you can refinance to create breathing room.

Then you can grow without constantly facing cash flow problems or lying awake at night worrying about making payroll.

Whether you need debtor finance, working capital loans, or want to refinance equipment loans to create headroom, we’ve helped plenty of operators work through exactly this situation.

Need help figuring out the right structure for your business?

Give us a call – we work with growing businesses across construction, transport, earthmoving, manufacturing, and agriculture. We understand the equipment, we know the cash flow challenges, and we can help you structure finance that actually works.

Call: 1300 346 532

Get your questions answered

Find answers to the most commonly asked questions below.

What types of equipment can I refinance to free up cash flow?

Best candidates are long-term assets with years of service life remaining: excavators, loaders, graders, bulldozers, prime movers, trailers, forklifts, manufacturing equipment, agricultural machinery. Avoid refinancing equipment near end of useful life, vehicles with high kilometers, or gear you’re planning to upgrade soon. Focus on core fleet equipment that you’ll keep for 5+ more years.

Should I use debtor finance or invoice finance for my business?

These are the same thing – different names for the same service. Invoice finance (debtor finance) advances you 80% of your invoice value within 1-2 days instead of waiting 60+ days for payment. It’s most useful for businesses with long payment terms from customers but immediate expenses to cover. Industries like construction, earthmoving, manufacturing, and transport often benefit most from invoice finance.

What’s the best way to manage equipment finance costs during expansion?

Consider refinancing existing equipment loans to reduce monthly repayments and create headroom for new equipment costs. For example, reducing payments from $45k to $34k per month frees up $11k to help offset new equipment finance of $15k per month. Combine this with working capital facilities or debtor finance to maintain healthy cash flow throughout the expansion period. The key is using all three strategies together – not relying on just one.

How much does business growth typically cost in cash flow?

An extra $1 million in revenue might deliver $100k-$200k in profit, but you won’t see that income for 60 days or more. Meanwhile, wages, finance payments, and running costs need paying monthly. Growth is cash-hungry even when it’s profitable. Plan for 2-3 months of cash flow pressure before new revenue starts flowing. Most businesses underestimate this gap and face cash crunches during their growth phase.

Can I refinance existing equipment to help fund new equipment purchases?

Yes. If you have equipment loans nearing the end of their term, you can often refinance them over a longer period to reduce monthly repayments. For example, refinancing might reduce payments from $45k to $34k per month, creating $11k in headroom to help offset new equipment finance costs. Only refinance long-term assets you plan to keep in your fleet for years – heavy equipment, prime movers, essential machinery. Don’t refinance gear you’re about to replace.

What is debtor finance and how does it help with cash flow?

Debtor finance (also called invoice finance) lets you access up to 80% of your invoice value within a day or two of issuing it, instead of waiting 60+ days for customer payment. It costs money, but keeps your business liquid during growth periods when cash flow is tight. Particularly useful for capital-intensive businesses in construction, transport, earthmoving, and manufacturing where payment terms are long but expenses are immediate.

How do I fund business growth without running out of cash?

Focus on two things: working capital and equipment finance structure. Use debtor finance or working capital loans to keep cash flowing while you wait for customer payments (typically 60+ days). Refinance existing equipment loans to free up monthly cash flow for new equipment purchases. Both strategies help bridge the gap between spending money on growth and getting paid for it. The key is planning ahead before you’re desperate for cash.