Selling your business with an EFTPOS advance still running: what happens to the balance

Yes, you can sell a business while an EFTPOS or revenue-based advance is still being repaid. What you usually can’t do is hand the advance to the buyer. The balance is normally paid out from the sale proceeds at settlement, so the job is to get a written payout figure early, release any registered security and make sure the numbers still work.

That sounds simple, and it mostly is. The trouble comes when owners discover the payout amount, a notice clause or a registered security interest a week before settlement. This guide walks through the order of things so the advance is a line on the settlement statement, not a last-minute surprise.

Why can’t the advance just go with the business?

A revenue-based advance is built on two things that don’t transfer: your trading history and your agreement. The provider looked at your terminal settlements, your bank statements and your credit before it paid you a lump sum. It is collecting by taking a share of each day’s card sales, or by debiting a fixed amount from your account. The moment the buyer takes over the terminal and the bank account, the provider loses its view of the takings and its way of collecting.

So in practice, three things happen to an advance when a business is sold:

1. It’s paid out at settlement from the sale proceeds. This is the most common outcome.
2. It’s paid out before settlement, either from your own funds or from another short-term facility.
3. It stays with the seller’s entity when only assets are sold and the entity keeps trading elsewhere. That’s unusual for small businesses and needs careful advice.

If you want a refresher on how these products collect, our page on revenue-based and EFTPOS finance covers the mechanics.

What does the payout figure actually include?

This is where many owners get caught. With an ordinary term loan, paying early usually cuts the interest you would have paid. Revenue-based advances often work differently: the provider sets a total repayable amount on day one, and the payout is whatever is left of that total. Taking it to settlement three months early may not save a cent.

Some providers do offer a discount for early payout. Some charge an administration fee to close the facility. The only way to know is to ask, in writing, for a payout figure that is valid on your expected settlement date.

What to ask the provider	Why it matters
The remaining balance of the total repayable	This is the starting number for your settlement statement
Any early payout discount	Some providers reduce the balance if you clear it early
Any closure or admin fees	Small, but they need to be on the statement
How long the payout figure is valid	Settlement dates slip, and the figure changes as daily collections continue
Whether there’s a registered security interest	It will need to be released so the buyer takes the assets clean
What notice the agreement requires for a sale	Selling without notice can sometimes trigger a default clause

Remember that collections keep happening until the day you hand over. Every trading day before settlement reduces the balance a little, so ask for a figure dated to settlement rather than today.

Will the buyer find out about the advance?

Usually, yes, and that’s fine. A careful buyer, or their lawyer or accountant, will look at your bank statements and see daily debits to a finance provider. They may also search the Personal Property Securities Register. The register describes its purpose plainly: a search can show whether “money is owing” against vehicles or machinery before someone buys them, and goods with debts against them “could be repossessed”.

Not every revenue-based provider registers an interest, but some do, often a broad one over the business’s assets. If a registration exists, the buyer will want it released at or before settlement so they aren’t taking on equipment with someone else’s interest attached.

Being upfront helps. Telling a buyer early that “there’s a card-based advance with roughly six weeks left, and it will be paid out from the proceeds” reads as organised. Having it found during due diligence reads as something you hoped nobody would notice.

How do the numbers work on settlement day?

business.gov.au’s guide to selling a business recommends a lawyer prepares the sale contract and suggests it should cover who pays outstanding creditors and employee entitlements. Your advance is one of those creditors.

On the day, the buyer’s funds come in and are directed according to a settlement statement. A typical order for a small business sale looks something like this:

• the sale price, less the deposit already paid
• adjustments for stock on hand, rent and outgoings
• payout to any secured lender, including a card-based advance if it holds security
• payout to the revenue-based provider if it doesn’t
• the balance to you

Then come your own obligations: the final BAS, any tax on the sale and employee entitlements. Your accountant should model all of this before you agree on a price, not after.

If you’re also carrying other short-term facilities and want to clear them before marketing the business, a business debt refinance can sometimes tidy several daily debits into one. Talk to a real person about whether that makes sense for your timeline. Start a quick enquiry here and we’ll look at it with you.

An illustrative example

Illustrative only. An owner of a busy suburban café agrees to sell for $280k. Seven months earlier they took a $60k card-based advance to replace a coffee machine and refresh the counter. The agreed total repayable has been coming out of daily settlements, and at the time of the sale contract about $22k of that total is still outstanding.

Here’s what the owner does:

1. Reads the agreement and finds a clause requiring written notice before any sale. They email the provider the week they sign the contract.
2. Requests a payout figure dated to the expected settlement, eight weeks out. The provider confirms the balance will keep reducing with daily collections and issues an estimate, with no early payout discount offered.
3. Asks whether a security interest is registered. It is, so the provider agrees to release it on receipt of the payout.
4. Gives the figures to their lawyer, who adds the payout to the settlement statement.
5. Keeps trading normally until settlement, so collections continue and the final figure comes in lower than the estimate.

The buyer’s adviser sees the daily debits and the PPSR registration during due diligence, but because the paperwork is already in hand, it’s a non-issue. The café settles on time.

For a closer look at how lenders view this type of business, see our guide to business loans for cafés.

What if you need the money before the sale settles?

Sometimes the advance is the problem, not the sale. A fixed daily debit can squeeze a business that’s quietening down while the owner prepares to exit. And sales can take months.

A few options owners consider:

• Keep trading as usual. If the business is healthy, the simplest path is to let collections run and pay out the balance at settlement.
• Ask the provider for a payment variation. Some will adjust a fixed daily debit when sales drop, especially if they know a payout is coming.
• Short-term property-secured finance. If you own property, a bridging loan secured over it can clear the advance now and be repaid from the sale proceeds. Property-secured options run from $20k to $5m.
• Refinancing other short-term debt. If the advance is one of several, consolidating them can stop the daily drain while the sale progresses.

Each of these has costs and trade-offs, so it’s worth running the numbers with your accountant.

It’s also worth thinking about the other side of the deal. If your buyer is borrowing to buy the business, their lender will look closely at your trading history. A clean run of card settlements is a strength here; it shows reliable revenue. Our page on business acquisition loans explains how buyers are assessed, which can help you prepare the information they’ll ask for.

Once the buyer takes over, they may want their own revenue-based or working capital facility. That will be assessed fresh, on their credit and, in time, on their own trading under the new terminal.

Selling up and need a hand in the meantime?

Getting a business ready for sale is a lot of work, and the last few months are often when cash is tightest. If an advance, a tax bill or a slow season is squeezing you before settlement, we can look at whether a short-term facility would help you get to the finish line in good shape.

Our enquiry takes about 60 seconds, and there’s no credit check when you first enquire. We don’t send your details out to a pile of lenders, so your phone won’t light up with strangers. A real person reads your situation, including the sale timeline, and calls you to talk it through. Please fill the form in accurately, especially the amount owing and expected settlement date, so we can point you to the right option first time.

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