The Working Capital Ecosystem: Why Cashflow Still Matters More Than Ever

With over sixty years of combined experience in the working capital and receivables finance sector, Kevin Melville and I have learned a truth that bears repeating: cashflow is king. Profit doesn’t protect a business when the cash runs dry.

At Thane Commercial, we exist to help SMEs build flexible capital frameworks that preserve liquidity, drive confidence, and support growth. The goal is always the same—move beyond rigid, property-secured models, and implement smarter, adaptive working capital ecosystems that align with how a business trades. There is one principle that has proven itself time and again—cashflow is the foundation of business resilience.

Profit might look good on paper, but it’s cashflow that keeps the doors open, the ATO at bay, and supplier relationships intact.

At Thane Commercial, we work with SME clients across Australia to design fit-for-purpose working capital solutions that align with how businesses actually operate. Not every business has property to offer. And not every challenge can be solved with a traditional loan.

Understanding the Working Capital Ecosystem

Working capital doesn’t function in a silo. It’s an ecosystem—a delicate balance between:

• ✅ Supplier Funding

• ✅ Inventory Control

• ✅ Receivables Management

When one of these is under pressure, the effects ripple through the business. The flow-on impact? ATO obligations slip, supplier terms tighten, and directors begin to absorb stress personally—both financially and reputationally.

The ATO as a Critical Stakeholder

Today, the ATO is no longer just a passive creditor. It is one of the most active and consequential forces in the SME funding landscape.

We are now seeing more businesses caught off-guard by:

• Director Penalty Notices (DPNs) that hold directors personally liable for PAYG, GST and Super

• Credit reporting of tax debts over $100,000 (since 2023), which directly affects trade terms and supplier confidence

• New enforcement and disclosure measures from 1 July 2025, which will reduce tolerance and compress timeframes for compliance

In our work, we’ve seen well-managed, growing businesses experience serious credit deterioration—not because they were unprofitable, but because they failed to structure their working capital to meet tax and compliance deadlines.

Once you’re on the ATO radar, your funding options shrink—and your cost of capital rises.

Rigid Lending Models Make Things Worse

The reality for many SMEs in Australia is that access to working capital is still too dependent on property security. This model often fails to meet the needs of modern, fast-moving, service-led, or asset-light businesses.

• It’s inflexible—there when you don’t need it, and absent when you do.

• It carries opportunity cost—trapping equity that could otherwise fuel growth.

• It creates poor trade-offs—like deferring ATO payments just to make payroll.

In some cases, this leads SMEs into short-term lending traps—high-cost facilities that provide a quick fix but damage relationships with primary funders and weaken the overall capital position of the business.

Receivables & Trade Finance: Purpose-Built for the Operating Cycle

At Thane, we work to structure facilities that match the rhythm of our clients’ business—not their real estate portfolio.

Receivables Finance and Trade Finance allow SMEs to:

• Pay suppliers early and secure better terms

• Convert invoices into cash—well before the 60–90 day mark

• Meet ATO obligations on time—protecting directors and preserving credit ratings

• Reduce dependence on personal security or director guarantees

These are not exotic or niche products. They are well-governed, widely used, and increasingly automated funding tools designed to bring control and confidence back to the SME operator.

Real-World Outcomes

Here are just a few recent examples where we’ve helped businesses take control:

🏭 Manufacturer – Flexibility Post-Bank Exit

• Challenge: Required a more flexible capital solution after exiting a Big 4 bank

• Solution: $5M Debtor Finance, $3M Trade Finance and $1M Equipment facility—providing liquidity aligned to operating cycle

🧪 Chemical Processor – Funded Through Transition

• Challenge: Poor relationship with existing funded due to personality issues, asked to exit

• Solution: $4M Debtor Finance facility with an alternative funder sourced with 12-month risk mitigants in place—business retained funding and resumed growth

🚚 Logistics – NewCo Acquisition Structuring

• Challenge: Transition from OldCo required use of existing receivables

• Solution: Negotiated release and replacement facility—$7M Debtor Finance facilitysecured with funding flexibility to support growth

🪵 Wholesale Timber – Funding for Seasonality

• Challenge: Seasonal $14M debtor peaks not supported by existing facility

• Solution: $15M Debtor Finance and $5M Trade Finance Facility to improve supplier terms and remove reliance on overdraft

📡 Telecom Contractor – Progress Claims Made Bankable

• Challenge: Progress-claim cashflow model wasn’t bankable

• Solution: $1.5M tailored Invoice Finance facility—85% advances against progress claim invoices which provided flexibility for project peaks as well as additional confidence to win larger tenders.

What’s the Alternative?

Too many good businesses fail—not because they’re unviable, but because they’re trading on a capital structure that no longer fits.

Here’s what we see too often:

• Late tax payments create director liability

• Credit ratings slip due to ATO disclosure

• Supplier terms worsen

• Profit margins erode

• Directors are forced to cover gaps personally

It’s time to rethink.

At Thane, we help clients unlock the working capital trapped in their trade cycle—using tools like Receivables Finance, Trade Finance and Supply Chain Finance—to create agility, compliance, and confidence.

Your receivables aren’t just accounting numbers—they’re one of your most powerful financial assets.

Thane Commercial Pty Ltd specialises in flexible working capital solutions for SMEs. If you would like to explore financial options tailored to your business needs, please visit us at www.thanecommercial.com.au or contact us via email to Neil Tunstall at neil.tumstall@thanecommercial.com.au or Kevin Melville at kevin.melville@thanecommercial.com.au