Quick answer
A quick loan to pay suppliers covers an overdue account, a cash-on-delivery demand or a large order before your customers pay. For smaller amounts, an unsecured loan sized on turnover can fund the same day once statements are linked, and lenders can often pay the supplier directly. For larger orders, property-backed options can move quickly. The goal is to protect the supply relationship and your trade credit.
Key points
- Protects supply and your trade credit terms.
- Lenders can often pay the supplier directly.
- Early-payment discounts can offset borrowing costs.
- Unsecured for smaller amounts; property for larger.
- Common triggers
- Overdue accounts, COD terms, bulk orders
- Unsecured range
- $5,000 to $500,000 (typical)
- Property-backed
- $20,000 to $5,000,000
- Useful to send
- The supplier invoice or statement
Suppliers are patient until they aren’t. One overdue month becomes two, the account goes on stop, and suddenly the stock you need for next week’s orders won’t ship until you’ve paid in full. Or a new supplier insists on cash on delivery. Or a big customer order means buying three times your usual stock. In each case, the cost of not paying is usually far higher than the cost of a short loan.
The supplier situations we see most
| Situation | What usually works |
|---|---|
| Account overdue and on stop credit | A loan to clear the balance and restore terms |
| New supplier demanding cash on delivery | A short loan for the first orders while terms are negotiated |
| Bulk order for a big customer contract | A cash flow or working capital loan repaid from the contract |
| Seasonal stock-up before peak trading | A short-term loan repaid from the season’s sales |
| Early-payment discount on offer | A loan if the discount beats the borrowing cost |
Talk to the supplier first
Before you borrow, call your supplier. Ask exactly what they need: the full overdue balance, or a part payment plus a plan? Will they reopen your account the day they’re paid? Would they accept direct payment from a lender? Suppliers would usually rather keep a customer than chase one, and a clear conversation can reduce the amount you need to borrow.
Unsecured or property-backed?
For most supplier payments, an unsecured cash flow loan is the quickest route. It’s sized on your turnover, needs no property, and for smaller amounts same-day funding is possible once statements are linked. For larger orders, especially when your turnover won’t support the full amount, a property-backed loan can lend more and is often more forgiving of a bumpy few months.
When early payment pays for itself
Some suppliers offer a discount for paying within seven or fourteen days. If the discount is 3% for paying 30 days early, that’s a meaningful saving over a short period. If the cost of borrowing for that month is less than the discount, you come out ahead. Run the numbers in dollars: discount saved versus total cost of the loan for the period you’ll hold it.
How quickly a supplier can be paid
For an unsecured loan, a supplier can often be paid the same day once you’ve linked bank statements, verified ID and signed. Having the supplier’s invoice, bank details and a contact who can confirm the payment speeds things up. For a property-backed loan, add the title search and valuation, which for straightforward properties can still be done quickly. If the supplier needs proof that payment is coming before releasing stock, ask the lender whether it can provide a settlement confirmation.
Protecting your credit with suppliers
Trade credit is one of the cheapest forms of finance a business has. Losing it means paying up front for everything, which ties up even more cash. Clearing an overdue account and then sticking to terms rebuilds that credit. Once you’re back on terms, ask whether a higher limit or longer terms are possible, particularly if your order volume is growing.
An illustrative example
A Wagga Wagga farm machinery parts retailer is two months behind with its main parts distributor after a slow winter, and its account is on stop with $48,000 owing. Spring is its busiest season, and without stock it’ll lose sales to competitors. The distributor agrees to reopen the account the day the balance is cleared. An unsecured lender approves a nine-month loan and pays the distributor directly that afternoon. Stock ships the next morning. Illustrative only.
Look at why the gap happened
If supplier accounts keep falling behind, borrowing is treating a symptom. Common causes are customers who pay slowly, prices that haven’t kept up with costs, or stock that sits too long on the shelf. Check how long your big customers take to pay; large businesses report their payment times publicly, which can help in a conversation about faster payment. A working capital facility might suit better than repeated one-off loans if the timing gap is built into your business.
What to send with your enquiry
- The supplier’s invoice or account statement.
- Your average monthly turnover.
- When you’ll be able to repay, and from what income.
- Whether the supplier will accept direct payment.
- If you’re considering property: the address, estimated value and what’s owing.
Keep the stock moving
Tell us who you owe, how much and by when. We don’t run a credit check when you enquire, your details aren’t sent around to a list of lenders, and a person will call to talk through how to get the supplier paid. Accurate details about the account and your trading mean a quicker, cleaner answer. Make an enquiry.
Frequently asked questions
Can the lender pay my supplier directly?
Often, yes. It's quicker for the supplier and reassures them that payment is real. Send us the invoice or statement with your enquiry.
My supplier has put me on stop credit. Can a loan help?
Yes, if clearing the overdue balance restores supply. Ask the supplier what they need to reopen the account, then size the loan to that.
Is it worth borrowing to get an early-payment discount?
Sometimes. If the discount is larger than the cost of borrowing over the same period, borrowing to pay early can save money.
What if this keeps happening?
A recurring gap usually needs a line of credit or a working capital facility, plus a look at your customer payment terms, rather than repeated short loans.