Working capital
Short-term business loans in Australia
A short-term facility can cover stock, payroll, a tax debt, or a contract that needs funding before payment lands. Here's how they're structured and priced against a bank overdraft or line of credit.
A short-term business loan bridges a working capital gap that a bank facility either can't move fast enough to cover, or won't approve at all - stock that needs paying for before it's sold, payroll during a slow month, a signed contract that needs funding before the client pays, or a tax debt that's become urgent.
What counts as short-term
There's no fixed definition, but a short-term business loan usually runs for months rather than years - commonly somewhere between three months and two years - and is repaid in one amount at the end rather than by instalments over a long term. Across the Alphacon range, terms run from 3 to 60 months, and Alphacon Fast, the product most often used for working capital, runs 6 to 24 months.
- Buying stock or materials ahead of a seasonal peak
- Funding a signed contract before the first progress payment lands
- Covering payroll or supplier payments through a slow quarter
- Clearing an ATO debt before it escalates
- Settling a purchase while a longer-term refinance is arranged
How it compares with the alternatives
| Option | Speed | Assessed on | Security | Relative cost |
|---|---|---|---|---|
| Bank overdraft | Slow to set up, instant once in place | Trading history and financials | Often property or a general security | Lower |
| Bank line of credit | Weeks | Trading history and financials | Usually property | Lower |
| Invoice finance | Days | The quality of your debtors | The invoices | Moderate |
| Unsecured online loan | Days | Bank statements and credit score | Personal guarantee | Higher |
| Property-secured private loan | Hours for terms, weeks to settle | The property, the LVR and the exit | Registered mortgage | Higher than a bank |
Speed means two different things here. A decision - indicative terms, then credit approval - can be quick with any lender that doesn't need two years of financials. Settlement depends on the valuation, the solicitors and any existing lender's discharge, and that is where most of the time goes. Ask a lender for both figures, not just the first.
A bank facility is almost always the cheapest money, if it exists and has room. The case for a property-secured private loan is a gap the bank can't or won't fill in time, and a larger amount than an unsecured lender will write.
How it's structured
Alphacon Fast is a self-declaration product built for exactly this kind of scenario. It is assessed on the security and the asset, a credit score isn't an approval criterion, and it's repaid with a single payment at the end of term rather than ongoing instalments. Interest is either paid monthly or prepaid at settlement. It lends from $200,000 to $10,000,000 against property in capital cities and select metro areas, to 75% LVR, from 9.49% p.a. Loans above $3 million are written in Sydney, Melbourne and Brisbane. For regional security, Alphacon Reach covers every Australian postcode.
The right short-term facility isn't the cheapest one - it's the one that actually settles before the business runs out of runway.
What it costs, and how to compare it
Short-term property-secured lending is priced higher than a standing bank facility, since speed and flexibility are being paid for directly. Compare offers on total cost over the period you'll realistically hold the loan, in dollars, rather than on the headline rate alone.
| Cost | How it's worked out | Amount |
|---|---|---|
| Interest | $500,000 × 9.49% × 9 ÷ 12 | $35,588 |
| Establishment fee | 1.65% of the loan | $8,250 |
| Loan management fee | 0.10% a month × 9 months | $4,500 |
| Total before risk fee and third-party costs | $48,338 |
A risk fee applies on Fast and is set by the schedule for the security type and LVR, and valuation and legal costs sit on top. Treat these figures as an illustration of the method, not a quote.
What a lender needs to see
A short-term property-secured loan needs far less paperwork than a bank facility, but it isn't paperwork-free. A complete submission is what gets indicative terms back the same day.
- What the money is for, and how much is needed
- The security property's address, or the contract of sale, and an estimate of its value
- Any existing mortgage over that property, with the current balance
- The borrowing company or trust, and who its directors or trustees are
- How the loan will be repaid, with whatever evidence already exists
- Any ATO debt or payment arrangement, disclosed upfront
Mistakes that slow a short-term loan down
Most delays on short-term files are avoidable. The most common is a valuation ordered late - it is the longest single step on most files, so it should be instructed as soon as terms are accepted. Close behind are an exit that is described but not evidenced, an existing lender's discharge figures that arrive at the last minute, and a borrowing entity whose documents don't match the name on the title. Each of these can add days to a settlement that was meant to take a week or two.
The other common mistake is borrowing for too short a term. A term that ends the week the exit is expected leaves no room for slippage, and an extension negotiated under pressure is rarely cheaper than a few extra months agreed at the start. If the exit is a receivable, assume it arrives late; if it is a sale, assume settlement slips at least once.
Plan the exit before you draw
A short-term loan is only as good as the way it's repaid. The exit should be specific and evidenced - a receivable with a date, a property sale under contract, a refinance already in progress - and it should still work if it arrives later than planned. Build in a buffer, and know the notice period for early repayment: 30 days on Fast, 14 days on Bridge.
Common questions
- How quickly can a short-term business loan settle?
- Indicative terms come back the same day on a complete submission. Settlement is typically two to four weeks from credit approval, and as little as five days on a clean metro file.
- Do I need financial statements?
- Not on Alphacon Fast. Income is self-declared or interest is prepaid, and the deal is assessed on the property and the exit.
- Is it unsecured?
- No. Every Alphacon loan is secured by a registered mortgage over Australian property. That's what allows larger amounts and faster decisions than an unsecured lender.
- Can I repay early?
- Yes. Alphacon Fast needs 30 days' notice. Alphacon Bridge needs 14 days' notice and has no early discharge fees.
Used for a genuine short-term gap with a clear repayment source, this kind of facility does exactly what it's built for: keeps the business moving while a temporary cash flow problem resolves itself.
Working capital, secured by property
How we structure short-term working capital and tax debt loans for companies and trusts, what to send, and what kills the deal.
Working capital business loansGeneral information only
This article is general in nature and does not take your circumstances into account. It is not financial or credit advice. Alphacon Capital writes business-purpose loans secured by property.
