Waiting on a big customer payment: bridging the gap

What should you do before borrowing?

A loan is a good tool for a late payment, but it isn’t the first step. Before you borrow, find out exactly where the money is:

1. Confirm the invoice is approved. Has it reached the right person? Is it in their system?
2. Check for disputes. Any queries about quantities, pricing or variations? Resolve them now.
3. Ask for a payment date. In writing if possible. “Next payment run on the 15th” is useful evidence.
4. Check your own terms. business.gov.au’s guidance on payments and invoicing covers setting clear terms — useful for next time, and for knowing where you stand now.

Sometimes a phone call solves the whole problem. When it doesn’t, you’ll at least know the realistic date — and that’s what the loan should be built around.

When does a short-term loan make sense?

When all of these are true:

• the debt is undisputed;
• the customer is reliable, if slow — they’ve always paid, eventually;
• the amount is large relative to your cash position;
• your own obligations (wages, suppliers, BAS) fall due before the payment will land;
• the cost of borrowing is less than the cost of paying your own bills late.

That last point deserves numbers. If the late payment would force you to pay the ATO late, the ATO’s guidance notes that general interest charge accrues on overdue amounts. If it would strain a key supplier, the cost may be lost terms or a lost relationship. A short-term loan with a clear exit can be the cheapest of those options.

How do you size and time it?

Amount: enough to cover what falls due before the payment arrives, not necessarily the full invoice value. Borrowing only what you need keeps the cost down.

Term: base it on the customer’s actual behaviour. If they’ve paid in 70 to 90 days historically, plan for 90, then add a buffer. A 3-month loan may be enough for a near-certain payment; a 6-month term with fair early payout gives more protection when timing is less certain.

Early payout: make sure you can repay as soon as the money lands without paying for unused months. See business loan early repayment.

Waiting on a payment right now? Start a 60-second enquiry — no credit check applies when you enquire.

What does it cost compared with the alternatives?

Option	Dollar cost	Other cost
Short-term loan	Fees + time-based cost until the invoice is paid	Paperwork, possibly security
Paying the ATO late	GIC on the overdue amount (not deductible from 1 July 2025)	Compliance record
Stretching suppliers	Possibly nothing — or lost discounts and terms	Relationship strain
Delaying wages	Not an option	Legal and staff consequences

Put your own figures in each row. The comparison is usually clearer than people expect.

Loan, invoice finance or line of credit?

• One big late invoice: a short-term loan with the invoice as the exit is simple.
• Many customers paying slowly, all the time: invoice or debtor finance grows with your receivables and may suit better.
• Recurring timing gaps: a line of credit lets you draw and repay as needed — see short-term loan vs line of credit.

What if late payment is the norm?

If more than one large customer regularly pays late, a loan only treats the symptom. Consider:

• tightening payment terms and following up earlier;
• asking for deposits or progress payments on larger jobs;
• building the real payment cycle into pricing;
• a standing facility sized to your typical debtor book.

A 13-week cash flow forecast makes the pattern — and the size of the facility you’d need — easy to see.

What if the customer might not pay at all?

Then the invoice isn’t a reliable exit, and a loan built on it is risky. If there’s any real doubt, borrow less, add a second repayment source, or look at your broader position first. business.gov.au’s guidance on managing debt includes practical steps and free support.

Illustrative: sizing a late-payment bridge

Illustrative figures only. A labour-hire business is owed $95,000 by a large client who usually pays 30 days late. Over the next six weeks it must pay:

Obligation	Due	Amount
Wages (three pays)	Weeks 1, 3, 5	$54,000
Super under Payday Super	Within 7 business days of each pay	$6,480
Quarterly BAS	28 October	$21,000
Total due before payment lands		$81,480
Cash on hand		$38,000
Gap to bridge		$43,480

Borrowing around $50,000 covers the gap with a margin — roughly half the invoice value. Repaid when the client pays, with daily accrual, the loan costs a few weeks of time-based cost plus fees. Borrowing the full $95,000 “to be safe” would roughly double the cost for no benefit.

The same logic applies to the term. If the client usually pays about 30 days late, a 3-month loan gives plenty of room. If their lateness varies widely, a longer term with daily accrual costs almost nothing extra when the money arrives on time and protects you when it doesn’t.

Bridge the wait sensibly

Tell us about the payment you’re waiting on — the amount, the customer, their history and what’s due on your side. A lending specialist will look at whether a short-term loan fits and how long it should run. Enquiring doesn’t touch your credit file, and your details aren’t circulated to other lenders. Please be realistic on the form about when the money will actually arrive — it’s the key to a loan that finishes cleanly.