Quick answer
You can combine funding routes, but each funder wants a clear claim on its own assets. Clashes arise when one lender holds a general security over everything, or two funders register over the same asset. Plan which asset backs which route, check the PPSR, ask lenders about priority, and sequence funding so that earlier claims don't block later ones.
Key points
- Assign each asset to one funder wherever possible.
- A general security over all your assets can block other funders.
- Priority between registered interests generally follows time of registration.
- Tell every funder what already exists before they ask.
Most growing businesses end up with more than one source of funding: supplier terms for everyday buying, an invoice facility for working capital, asset finance for the next truck, perhaps a property loan behind it all. Done well, each piece covers a different part of the business. Done badly, the pieces fight over the same assets, and the fight is usually won by whoever registered first.
This guide is about doing it well.
Why can’t two funders just share an asset?
They can, but only if their claims are ranked and each is comfortable with its position. A funder lends because, if repayments stop, it can take and sell the thing it holds security over. If another funder also claims that thing, one of them gets paid first and the other may get little. Funders therefore either want to be first, or want to be sure of the pecking order.
The PPSR guidance for business describes the rule of thumb: a “first in, best dressed” principle, where earlier registrations generally rank ahead of later ones.
What are the usual clash points?
| Clash | What happens | Typical fix |
|---|---|---|
| Bank holds a general security over everything | Invoice or equipment funders can’t get a clean first claim | Carve-outs, priority deeds, or refinancing the bank facility |
| Two funders both want the debtor book | Only one can be first | Choose one invoice funder |
| Asset finance on a machine plus a general claim | The general claim may reach the machine | Specific priority for the asset funder |
| Supplier retention of title over stock | Stock isn’t fully yours until paid | Fund purchases, not the stock itself |
| Old registrations never discharged | New funders see ghosts | Request discharge |
| Property already mortgaged | A second mortgage sits behind | Check equity after the first lender |
What is a general security agreement, and why does it matter?
A general security agreement is a security that covers all, or substantially all, of a business’s present and future personal property: receivables, equipment, stock, cash and more. A lender takes one to be sure nothing escapes. It is registered on the PPSR, so it is visible to any other funder who searches.
For you, the consequence is practical. If a bank’s general security sits across everything, a specialist funder may decline to take a second-ranking claim over your invoices or equipment, or will ask the bank to step aside from specific assets. That is not unreasonable, and it’s one reason it pays to know what is on the register before you approach anyone.
Illustrative example only. A packaging business has a bank overdraft backed by a general security. It wants invoice funding for its debtors and a separate loan for a new machine. The invoice funder asks the bank to carve out the debtors; the machine funder takes a specific interest in the machine. The business plans these in order, rather than discovering the problem halfway through.
How do you plan a stack that works?
- List every asset and flow you could pledge. See how to fund a business without a bank for the inventory method.
- Assign each to a route, aiming for one funder per asset. For example: debtors to invoice funding, a machine to asset finance, property to a mortgage, and sales and statements to a line of credit.
- Search your own PPSR record to see what is already registered, and what should have been discharged.
- Rank the routes by timing. Anything with a general security goes in a defined place in the sequence.
- Tell each funder the full picture before they ask: existing registrations, other facilities and guarantees.
- Get priority arrangements in writing if two funders touch the same asset.
Which combinations tend to work well?
- Supplier terms plus a line of credit. The supplier funds stock; the line covers wages in the gap.
- Invoice finance plus equipment finance. Different assets, different funders.
- Property loan plus asset finance. Property secures the large amount; the equipment funder stays on the equipment.
- A contract-based facility that converts to invoice funding. The same funder follows the work from order to payment. See trade and purchase order finance.
Which combinations tend to cause trouble?
- A general bank security plus a second general security. Only one can be first.
- Invoice finance plus a sales-linked repayment that draws on the same bank account. The two can collide on cash.
- Several unsecured loans with guarantees stacked on the same directors. Each is a promise from the same pocket.
On that last point, ASIC’s guidance for company directors reminds you that lenders may require personal guarantees, that a director may have to pay personally if the company cannot, and that independent advice before signing is wise. Count guarantees as a combined exposure, not as separate risks.
What about cash flow, not just security?
Even if the claims don’t clash, the repayments can. Each facility has its own schedule. Lay them out on one calendar with BAS dates, payroll and super, and see where the pinch points fall. A stack that works in a good month and fails in a bad one is not a plan. Our guide to total cost in dollars helps compare the layers.
What does a layered structure look like on paper?
A one-page diagram is worth drawing. Down the left, list your assets: debtors, equipment, stock, property. Across the top, list your facilities: invoice funding, asset finance, line of credit, mortgage. Mark which facility is secured over which asset. Each asset should have one clear owner, or an agreed ranking if two facilities touch it. Any asset with no marks is free for future use. Any asset with two marks needs a written priority arrangement.
Showing this to a new funder at the start of a conversation is powerful. It tells them you understand your position and removes the unpleasant surprise that comes from discovering overlaps late.
What questions should you ask a funder about priority?
- Will you register on the PPSR, and over which assets exactly?
- Do you require any other funder to step back, and will you sign a priority arrangement if needed?
- What happens to your claim when I repay or refinance another facility?
- Do you require a general claim over everything, or will you accept a specific one?
- How is your registration removed when the facility ends?
The answers vary by funder and by deal. Getting them early lets you design the stack rather than patch it.
How do you unwind a stack that has become tangled?
Start by drawing it, as above. Identify the overlaps and decide which facility is most valuable to keep in its current form. Then talk to the funders involved, beginning with the one holding the broadest security. Sometimes a single refinance can simplify several overlapping facilities into a cleaner set. Sometimes a simple carve-out letter is enough. And sometimes the right answer is to repay a small facility early, even at a cost, to free an asset for a better use. Whatever the route, do it deliberately and with the funders’ knowledge, not by surprise.
When should you not combine routes?
If the business is small and the need is single, one route is simpler and cheaper. If you are unsure about the security position, stop and check before adding anything. And if repayments across routes would absorb most of your margin, simplify first.
How do you start layering sensibly?
Start with the biggest, most natural fit and add pieces one at a time, checking the register before each. Tell us what you already have in place, and a specialist will help you plan a sequence. The enquiry takes a minute with no credit check, your details are not sent to a crowd of lenders, and a real person reads it and calls. Accurate detail on existing finance and security is what lets us match you correctly the first time. See if you qualify.
Frequently asked questions
Can I have invoice finance and a bank overdraft at the same time?
Sometimes, but the bank's security often covers debtors. The two funders typically need to agree on who has priority over what, or the arrangement has to carve out the invoices.
What is a general security agreement?
A security that covers all, or substantially all, of a business's present and future personal property. It is registered on the PPSR, so other funders can see it and will usually need to deal with it.
Does the order I take funding in matter?
Often, yes. Earlier registrations generally rank ahead, so the sequence can decide whether a later funder gets the claim it needs.
How do I remove a registration after a loan is repaid?
Ask the secured party to discharge it, and check the register afterwards. Leftover registrations can confuse new funders and slow things down.
Can a supplier's claim affect my funding?
Yes. Suppliers with retention of title or consignment arrangements can have registered interests in goods you hold, which affects what other funders can take.