Smart Advance · Finance Field Guide
Learn the market before you borrow from it.
Business finance is not one product and lenders do not all assess the same risk. This guide explains the lending ladder, the products on each rung, and the details that change the answer for different business models.
Capacity: can the business carry it? Access: which parts of the market are open? Structure: is this the right product, term, security and exit?
Public information, made useful
The value is in how the pieces are put together.
The Field Guide draws on publicly available government, regulator, tax, product and market information. Smart Advance uses decades of commercial-finance experience to identify the questions and trade-offs worth understanding, then organises them through CAS and the Lending Ladder. It is education and market context, not a lender policy manual or personalised financial advice.
The lending ladder
Flexibility is usually bought with price, security or both.
Usually strongest on clean financials, established trading, serviceability and acceptable security. Often lower cost, but slower and less tolerant of exceptions.
More flexible on documents, timing and some policy edges. Pricing can be above bank levels because flexibility and speed are part of what is being bought.
Can assess difficult credit, shorter history, unusual cash flow, invoices, assets or specific industries. The product matters more than a generic “business loan” label.
Property/security, leverage, legal position and a credible exit can lead the decision. Useful for time-sensitive or complex situations, but short terms and fees make exit discipline critical.
Product field guide
The purpose decides the product. The product decides what gets underwritten.
Unsecured working capital
No property does not mean “no security” in the practical sense: many facilities still rely on director guarantees and may register security over business assets. The expert read is whether the requested amount fits the trading profile, whether bank statements show clean conduct, what existing daily/weekly debits already consume, and whether the funding solves a temporary gap or simply funds an ongoing loss.
Watch the mismatch
A partial approval can make the problem worse
If a business needs $50,000 to finish the job and can only raise $20,000 at specialist pricing, the right question is not “can I get approved?” but “does the smaller amount complete the commercial objective after a new repayment is added?”
Line of credit / overdraft
A line is designed for a recurring gap that goes up and down. Interest is normally about the drawn balance, while line/review/unused-limit fees may sit on top. If the facility is permanently maxed out, a term loan may be the more honest structure because the “revolving” need is not actually revolving.
Invoice / debtor finance
The lender is underwriting the receivables as much as the borrower. The important fields are debtor concentration, debtor credit quality, actual payment behaviour, invoice ageing, disputes, credit notes/dilution, recourse and which invoices are eligible. A $1m ledger concentrated in one slow-paying debtor can produce less usable availability than a smaller, diversified clean ledger.
Trade and stock finance
Good stock finance follows a known cash-conversion cycle: supplier payment, freight/import, inventory holding, sale and customer cash. It is a poor match for speculative or ageing stock where the only repayment plan is “sales should be strong”. Compare the facility term to actual stock turn and gross margin.
Vehicle, plant and equipment finance
The asset itself can support the facility, so amount-to-turnover is less useful than asset value, useful life, age at the end of term, source of sale, condition, deposit and resale market. A specialised fit-out is different: it may have little recoverable resale value and can behave more like unsecured cash-flow lending. Chattel mortgage, hire purchase and lease are tax/accounting wrappers as well as finance structures; confirm GST, ownership and depreciation treatment with an accountant.
Property-backed, bridge and private finance
Equity is not the same as borrowing capacity. Lenders work from valuation, current debt, proposed ranking and maximum leverage, then test the exit. For a bullet facility, model net exit proceeds after prior mortgages and costs against the actual payout, not just the property value against the original advance. Second mortgages also bring first-lender consent/intercreditor risk. Caveat/private facilities need particular attention to minimum interest, capitalisation basis, default rate, extension fees and legal costs.
Construction and development finance
Development credit is a project underwriting exercise. The core pack is feasibility, total development cost, gross realisation/end value, sponsor equity, builder and construction contract, QS/costings, contingency, presales or other commitments where required, draw schedule, cost-to-complete and exit. The approved limit is not the average debt: interest generally follows progressive drawdowns, so a draw curve matters when comparing cost.
ATO debt and refinance
An ATO payment plan can be workable when it is being met. Commercial refinance may improve cash flow or lender access, but it is not automatically cheaper. Since 1 July 2025, ATO general interest charge incurred from that date is no longer deductible, so the correct comparison is after tax and after all commercial finance fees, not headline rate against headline rate. Get the tax treatment checked by the accountant.
Business-type field guide
The same turnover can mean very different credit risk.
Certified claims and strong principals can support receivables/progress funding. Uncertified variations, concentrated principals, retentions and thin remaining job margin are different risks.
Card sales help verify revenue; rent, payroll, lease term, site concentration, seasonality, supplier arrears and quiet-month capacity often decide the file.
Fleet age, encumbrances, maintenance, fuel, utilisation, customer concentration and contract tenure sit beside the vehicle value.
Retainers are different to project revenue. Billed debtors are different to unbilled WIP. One principal producing most revenue creates a key-person concentration.
Acquisition finance may need separate treatment for goodwill, equipment, fit-out and premises. Lease length and continuity of billings can be central to a goodwill-heavy deal.
Inventory turn/ageing, supplier terms, debtor days, concentration, WIP, gross margin and equipment uptime determine whether invoice, trade, asset or term finance fits best.
Seasonal inputs and sale windows make one average month a weak serviceability lens. Security, production cycle, commodity/weather exposure and timing of receipts need to be read together.
Inventory deposits, freight/duties, warehousing, advertising and processor settlement occur before cash is realised. Fund stock with a demonstrated turn/margin, not just a revenue growth forecast.
Use the system
Education first. Then the numbers. Then the right person.
Start with CAS in Finance Readiness, price the actual structure in Cost Check, X-ray a real offer, and pressure-test any short-term exit before you sign.