This facility is one of the most useful financial tools available to an Australian small business. It is also one of the most frequently misused.

Used correctly, it smooths out the timing gap between costs and revenue, reduces the stress of irregular cash flow, and allows the business to act quickly on opportunities without a new application cycle each time. Used poorly, it becomes permanent debt that masks a structural problem the business needs to address differently.

The difference between these two outcomes comes down to understanding what the product is actually designed for.