Glossary
Fast business finance, decoded
The terms you will hear when you are trying to get funded quickly, explained in one or two plain sentences.
Fast lending has its own vocabulary, and a deadline is the worst time to be learning it. Here are the words that come up most when a business needs money quickly. Where we have a deeper explanation, the term links to it.
- ABN
- Australian Business Number. Lenders check it against the Australian Business Register to confirm the business is active and when it was registered.
- ACN
- Australian Company Number, issued by ASIC to every company. Lenders use it to confirm directors and company status.
- Approval in principle
- An early yes based on the information supplied so far, subject to conditions such as ID checks, signed documents or confirming security.
- Bank statement link
- A secure, read-only connection that lets an assessor view your business transactions without being able to move money. Far faster than emailing PDFs.
- BAS
- Business Activity Statement, lodged with the ATO monthly or quarterly to report GST, PAYG withholding and other amounts. Lenders often read it alongside bank statements.
- Bridging finance
- Short-term funding that bridges the gap until a known event, usually a property sale, settlement or refinance.
- Capitalised interest
- Interest that is added to the loan balance rather than paid as you go, so there are no regular repayments during the term.
- Caveat
- A notice lodged on a property title that warns anyone dealing with the property that someone else claims an interest in it. A caveat loan uses this as its security.
- Cash flow lending
- Unsecured lending sized mainly on how the business trades, as shown in its bank statements and turnover, rather than on assets.
- Conditions precedent
- The things that must happen before funds can be released, such as signed documents, verified ID or a payout figure from another lender.
- Cost of delay
- What a business loses for every day money arrives late: penalties, missed discounts, lost sales and idle staff.
- Default
- A record on a credit file showing an overdue debt was reported by a creditor. Considered case by case for business lending.
- Director guarantee
- A personal promise by a company director to repay the loan if the company cannot. Common in business lending.
- Discharge
- Removing a mortgage or caveat from a property title once the loan is repaid.
- Drawdown
- Taking money out of an approved facility, such as a line of credit.
- Equity
- The part of a property you own outright: its worth minus all loans secured against it.
- Establishment fee
- A one-off fee charged when a loan is set up. Always part of the total cost of finance.
- Exit strategy
- How a short-term loan will be repaid: a sale, a refinance, a big receivable or business cash flow.
- First mortgage
- The main mortgage on a property, registered first and repaid first if the property is sold.
- General interest charge (GIC)
- The ATO's interest on overdue tax debts. From 1 July 2025 it is no longer tax deductible.
- Guarantor
- A person who agrees to repay the loan if the borrower cannot.
- Invoice finance
- Funding advanced against unpaid invoices owed by your business customers.
- Line of credit
- A standing limit you can draw, repay and draw again, paying only for what you use.
- Low doc
- Lending that relies on lighter paperwork, such as bank statements, BAS or an accountant's letter, instead of full financial statements.
- LVR
- Loan-to-value ratio: the total of all loans on a property as a percentage of its worth. Lenders set their own maximum.
- NPP
- New Payments Platform: Australia's real-time payments system, which lets eligible payments move between participating accounts in seconds, around the clock.
- PAYG withholding
- Tax an employer withholds from wages and pays to the ATO.
- Payday super
- From 1 July 2026, employers must pay super at the same time as wages rather than quarterly.
- Payout figure
- The exact amount needed to repay a loan in full on a given day, including interest and fees.
- PEXA
- The electronic platform used in Australia to lodge property dealings and settle transactions online.
- PPSR
- Personal Property Securities Register: the national register where security over equipment, vehicles and other personal property is recorded.
- Prepaid interest
- Interest paid up front for a period, so there are no repayments during that period.
- Second mortgage
- A mortgage registered behind an existing first mortgage on the same property.
- Security
- An asset, usually property, that a lender can rely on if a loan is not repaid.
- Serviceability
- Whether the business can comfortably meet repayments from its cash flow.
- Settlement
- The moment a loan is funded and any security is registered, or a property changes hands.
- Statutory demand
- A formal demand for payment of a debt owed by a company. If it is not dealt with in time, the creditor can apply to wind the company up.
- Term
- How long the loan runs. Short-term business loans often run from a few weeks to a couple of years.
- Total cost of finance
- Everything you repay above the amount you receive: interest plus every fee. The fairest way to compare offers.
- Unsecured loan
- A loan without property security, sized on turnover and bank statements.
- Valuation
- A formal report on a property's worth. Our property-secured business loans need no valuation, which removes a major delay.
- Working capital
- The cash a business needs to run day to day: paying wages, suppliers and bills while waiting for customers to pay.
Common questions
What is the difference between a caveat loan and a second mortgage?
Both sit behind an existing first mortgage. A caveat loan uses a caveat lodged on the title, which can be very quick to put in place. A second mortgage is a registered mortgage. A caveat can later be converted to a registered second mortgage.
What does total cost of finance mean?
It is everything you repay above the amount you receive, including interest and all fees. It is the fairest single number for comparing two offers.
What is an LVR?
Loan-to-value ratio: the total of all loans on a property divided by its worth, shown as a percentage. Lenders each set their own maximum.
What is a statutory demand?
A formal written demand for a debt owed by a company. If the company does not pay, settle or apply to set it aside within the time allowed, the creditor can apply to have the company wound up.
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