Updated on 27th February 2025
Recent statistics regarding small and medium sized businesses in Australia indicate significant business finance and working capital-related concerns. 87% of small businesses in the country experience cash flow issues and – perhaps more shockingly – 34% of small business owners have had to forgo their own salaries as a result.
In the best-case scenario, SMEs would have a rainy-day fund or an emergency cash pool to draw from until the economic shock, drop in demand, or business disruption passes. However, for those without such a financial buffer, emergency finance and loans may provide a viable solution.
At ScotPac, we prioritise our clients’ needs, carefully weighing the pros and cons of each solution to ensure the right finance facility for your situation.
Evaluating the Different Options for Emergency Business Finance
1. Business Loans
In the past, small business loans were considered unsuitable for emergency business finance. While this remains true for long-term solutions, a tailored business loan from ScotPac can serve as a fast funding solution to help stabilise your company during particularly difficult periods.
Introducing Cash Line
Our team has launched a new funding solution specifically designed for SMEs: Cash Line.
In short, it functions like a flexible line of credit, offering businesses fixed-limit credit. While eligibility requirements still apply, loan limits can reach up to $500,000 with a minimum 12-month term.
How is Cash Line suitable for emergency funding needs?
Cash Line offers fast funding, with approvals in as little as 24 hours, allowing small businesses to address emergency cash flow challenges quickly. Additionally, it doesn’t require principal repayments or security. This means SMEs without business assets, such as property, and those facing cash flow constraints are no longer restricted from accessing the working capital they need.
Discover how we utilised Cash Line solution to help one of our clients achieve fast, flexible growth.
So, while business loans may not always be the best long-term solution, if your business requires short-term financing, speak to our team today.
2. Invoice Finance
Invoice Finance allows businesses to quickly and easily access emergency funding on their own terms. By leveraging outstanding sales invoices as collateral, SMEs can receive a cash advance of up to 85% of the invoice value. Once the invoices are settled, the rest of the money – less fees – is provided.
When you consider that small businesses receive late payments from customers three times more often than big companies, it is easy to understand why Invoice Finance can be an effective solution to ensure reliable, controllable cash flow.
If your business needs quick access to funding without taking on debt, Invoice Finance provides a scalable, long-term solution.
Discover more about this financing option, including its advantages and disadvantages, in our guide on What is Invoice Finance or see how Invoice Finance has supported real businesses in our case study here.
3. Asset Finance
Asset Finance, or Asset Financing, allows businesses to unlock capital otherwise tied up in their assets. It can be an effective solution for raising emergency funds fast and allowing additional capital to be available within your business without the cost of taking on debt.
The higher the value of the asset the more funding can be secured. When you apply for Asset Finance, the funding provider will inspect the asset you want to refinance and provide a valuation. This valuation is used to determine how much you can receive as a cash advance.
While assets such as machinery or vehicles remain available for business use, ownership temporarily transfers to the funding provider once the cash advance is issued. Once repaid, including interest, ownership reverts to your business.
To see Asset Finance in action, read how our team provided a flexible asset-backed loan, leveraging a client’s assets to unlock essential working capital.
4. Business Credit Card
Business credit cards offer an alternative short-term funding solution. Ongoing operational expenditure or unexpected large costs can be spread out in payments over a more extended period of time.
A business credit card can also help SMEs rebuild their credit score if a financial emergency has had a negative impact. As long as your business stays on top of monthly repayments, paying off the balance will improve your score and make securing future business loans or other lending facilities easier.
While credit cards are relatively easy to access for many small businesses, it’s important to be mindful of the high interest rates they can carry. Ideally, clearing the balance each month will prevent debt from compounding due to interest. Always check for any additional fees associated with a credit card before committing.
5. Merchant Cash Advance
Merchant Cash Advances help small businesses manage cash flow by providing funding based on projected earnings. Unlike Invoice Finance, which is secured against outstanding invoices, this facility offers a cash advance based on anticipated future card sales.
How does it work? It is simple – you receive a lump sum upfront and repay the amount owed in instalments, plus interest, through a percentage of your future card sales. While you will need historical card sales revenue to determine your borrowing capacity, a Merchant Cash Advance is a fast and accessible way to access much needed working capital in the event of an emergency.
For more information read our guide on The Pros and Cons of a Merchant Cash Advance.
Need Emergency Finance? ScotPac will find the right option for you
While ScotPac doesn’t offer Business Credit Cards or Merchant Cash Advances, we provide a range of business finance solutions designed to support businesses in urgent need of working capital. As Australia’s largest non-bank lender and the trusted financial partner of over 8,500 businesses, we have the expertise to help you navigate financial challenges.
Our lending specialists take the time to understand your industry, needs, and business goals. If your business is facing an emergency and requires fast, flexible funding – reach out to our team today for a tailored solution.