What can a working capital loan actually be used for?

Payroll during a gap — a progress draw that has not landed, an invoice on sixty-day terms, a payer running slow. The money is genuinely earned and merely in transit.

Stock or materials ahead of revenue. Self-liquidating uses are the strongest case for short-term money, because the thing you buy becomes the revenue that repays it.

A defined, dated obligation: a tax bill, an insurance renewal, a supplier settlement that unlocks a discount larger than the cost of the money.

Bridging a known seasonal trough where the following season is predictable rather than hoped for.

Equipment. A machine outlives a twelve-month term several times over, and financing it as equipment costs materially less because the asset secures the debt.

Premises, fit-outs and anything else that pays back over years. Matching a three-year payback to a nine-month repayment is how a profitable purchase becomes a cash-flow crisis.

Losses with no identified cause. Short-term money buys time, and time only helps if you know what changes during it.

Servicing another advance. That is stacking, and it is usually a breach of the first agreement as well as bad arithmetic.

You will be asked what it is for, and the answer affects pricing more than most applicants expect. A documented inventory buy is a different risk from an unspecified cash need.

Nobody audits the spend afterwards in the way a bank might on a project loan. That is convenience, not permission — the discipline has to be yours.

The test worth applying: will the thing this money buys generate cash before the repayment ends? If not, it is the wrong product rather than the wrong amount.