Seven questions that show a cash crunch is coming — before it arrives

Most cash crunches don’t arrive out of nowhere. They build over weeks or months, and the signs are usually sitting in plain view — in the bank account, the BAS, the supplier emails. The trouble is that busy owners are looking at jobs, customers and staff, not patterns.

These seven questions take five minutes. Answer them honestly. If two or more come back “yes”, it’s time to act — calmly, early, while you still have choices. business.gov.au’s pages on financial trouble cover the wider warning signs; these are the ones that matter most for cash.

1. Am I using tax or super money to pay other bills?

GST collected, PAYG withheld from wages and super owed to staff aren’t really the business’s money. When they start funding stock, rent or wages, the business is borrowing from the ATO and from employees without a plan to pay it back.

Why it matters now: from 1 July 2026, Payday Super requires super to reach employees’ funds within 7 business days of payday, according to the Fair Work Ombudsman. The old habit of using quarterly super money as a float no longer works.

If yes: open a separate account for GST, PAYG and super and move the money each time you’re paid. If there’s already a shortfall, see paying tax or BAS with a business loan.

2. Are customers taking longer to pay?

Look at the last three months of invoices. Are customers paying later than your terms? Is one big customer stretching from thirty days to forty-five, then sixty? Slow debtors drain cash even when sales are growing.

If yes: tighten the process. business.gov.au suggests collecting payments faster by automating invoicing and updating payment terms. Invoice on completion, send reminders before the due date, call on big invoices, and consider shorter terms for new customers.

3. Are suppliers tightening terms?

When suppliers shorten terms, ask for deposits or move you to cash on delivery, it’s sometimes a sign they’ve noticed you paying later. It also means you now need more cash upfront for the same stock.

If yes: talk to your key suppliers before it escalates. A reliable history and an honest conversation can sometimes restore terms. If the business needs to pay faster than before, a line of credit can smooth the timing — see covering a cash flow gap.

4. Is the lowest point in my account falling month after month?

Averages hide trouble. Instead, find the lowest balance in your business account each month for the last six months. If that low point is sliding — even while the average looks fine — the business is using up its buffer.

Month	Lowest balance	Trend
Month 1	Comfortable	—
Month 2	A little lower	Watch
Month 3	Lower again	Warning
Month 4	Near zero or overdrawn	Act now

If yes: build a thirteen-week cash forecast using business.gov.au’s cash flow statement template. It tells you when the next low point arrives and how deep it will be.

5. Am I juggling which bills to pay each week?

If you’re regularly deciding which supplier waits, moving due dates, or paying one bill with money meant for another, the business is running without a buffer. It’s exhausting, and it’s usually a sign the gap is bigger than it feels.

If yes: list every upcoming payment for the next eight weeks, with dates. Seeing it on one page takes the guesswork out and shows exactly how much breathing room is needed. At this point, a conversation with someone who can see the whole picture helps — you can send a 60-second enquiry with no credit check at that stage.

6. Am I stacking short-term debt?

One short-term loan is a tool. Two or three, each with daily or weekly repayments, is a pattern — and a dangerous one. The repayments come out several times a week, eat the margin, and push the business towards the next facility.

If yes: stop adding and look at consolidating. One structured loan, often with property security and a longer term, can replace several stacked facilities with one repayment the business can actually carry. See refinancing business debt.

7. Is growth using more cash than it brings in?

Growth is expensive before it pays. A big new customer means buying stock, hiring staff and waiting to be paid. If each month’s growth requires more cash than the last month’s profit provides, the business can grow itself into a crunch.

If yes: fund growth deliberately rather than from the operating account. Match finance to the purpose: a line of credit for working capital, a term loan for equipment, a structured facility for a contract. Our pages on borrowing to hire staff and borrowing to buy stock cover two common cases.

What should I do if two or more answers were “yes”?

Act in this order:

1. Build the thirteen-week forecast. Know the depth and timing of the gap.
2. Pull the non-finance levers. Chase debtors, talk to suppliers, pause discretionary spending, reduce slow-moving stock.
3. Lodge on time, even if you can’t pay in full, and talk to the ATO early if tax is involved. The ATO says debts of $200,000 or less can often be put on a payment plan through its online services.
4. Decide whether finance fits. Finance is right for timing gaps with a clear end. If the business is losing money month after month, fix that alongside any funding.
5. Apply once, to the right place, with complete information. Our page on when to apply for business finance explains why early is better.

How do I tell a timing problem from a profit problem?

This matters because finance fixes one and only postpones the other.

• Timing problem: the business is profitable over a year, but money arrives after it’s needed. Seasonal dips, slow payers, growth and tax timing are classic causes. Finance can bridge it.
• Profit problem: costs exceed income over a year. Prices too low, margins squeezed, demand fallen. Finance buys time, but the fix is in pricing, costs or the business model.

Many crunches are a bit of both. The forecast will show which dominates.

What does catching it early look like? (Illustrative example)

Illustrative only — invented business.

A Gold Coast surf shop owner answers the seven questions in April. Three are “yes”: the GST money has been used for winter stock, a wholesale customer has stretched to sixty days, and the account’s monthly low point has fallen three months running.

She builds a forecast: the low point in late July, when the June BAS, insurance renewal and a slow winter overlap, is uncomfortably deep. In May — with statements still clean — she sets up a modest line of credit, moves GST into a separate account from then on, and calls the wholesale customer about their terms. In July, the line covers the gap; by October it’s cleared. The crunch never arrives.

If she’d waited until July, the same facility would have been harder to arrange, with dishonours on the statements and a BAS already overdue.

How often should I run this check?

Monthly, alongside your bookkeeping. It takes five minutes once it’s a habit. The loan navigator is also a quick way to see which route would suit if you do need finance.

Talk to someone before the crunch, not during it

The best time to arrange finance is when you first see the pattern, not when the account is empty. Enquiring with us doesn’t involve a credit check, your details aren’t blasted out to every lender going, and a real person helps you work out whether it’s a timing gap finance can bridge. Please be honest on the form about tax, debts and what’s causing the pressure — accurate answers are how we find the option that actually fits.

Get ahead of the crunch →