At Cloudfloat, you can request an increase to your approved borrowing limit at any time.
When you ask for a new limit, Cloudfloat assesses the likelihood that you can repay using multiple risk factors such as trading history, financial position, and payment behaviour. In some cases Cloudfloat may require security and/or collateral to support the higher limit; in others, you may choose to “park” collateral to guarantee or unlock a new limit.
This article explains what security and collateral mean, when they may be required, and how they are used at Cloudfloat.
What is security or collateral?
Security (or collateral) is an asset, guarantee, or financial commitment that is provided to support a Cloudfloat payment advance or facility. It gives Cloudfloat an additional way to recover funds if obligations are not met, which in turn helps Cloudfloat offer higher limits and better terms to customers overall.
Requiring security does not reflect negatively on a customer; it is a common and prudent measure used across financial services to manage risk fairly and consistently.
At Cloudfloat, security arrangements are always:
Proportionate to the level of risk and the limit requested.
Clearly explained in plain language before you sign anything.
Agreed to in writing before any funding is released under the new limit.
Security arrangements at Cloudfloat
Cloudfloat may ask for different levels of security documentation depending on the size of the facility, the structure of your business, and the risk profile of the request.
Standard documentation
For approved limits, the security arrangements will be satisfied through standard documentation such as:
Signed Terms of Service Agreement
Confirms the terms under which Cloudfloat provides payment advances and sets out your obligations as a customer.
Deed of Guarantee (Directors and/or Owners)
A personal guarantee for any outstanding amount, signed by each and all directors and, where applicable, beneficial owners of the business.
This means the guarantors agree to meet the business’s obligations to Cloudfloat if the business itself does not.
Additional security for higher limits
For higher limits (for example, facilities over $100,000), Cloudfloat may, at its discretion, ask for additional security to support the increased exposure.
This can include:
General Security Agreement (GSA) over the business
A security interest over the assets of the business (for example, plant and equipment, receivables, and other property).
Registered on the Personal Property Securities Register (PPSR) to give Cloudfloat a senior claim over those assets if the business defaults.
General Security Agreement (GSA) from each Director
A security interest over certain personal assets of the director, again typically registered on the PPSR.
Used only in higher‑risk or higher‑limit scenarios where Cloudfloat needs additional comfort to offer the requested facility.
Cloudfloat will always discuss any additional security with you before it is put in place and will provide copies of all documents for your records.
Parking collateral
In some situations, instead of (or in addition to) formal security documents, Cloudfloat may allow you to “park” collateral to support a higher limit or to secure a specific advance. This gives you a way to back your facility with assets or rights that you already hold.
What is collateral at Cloudfloat?
For Cloudfloat customers, collateral can include:
Cash or cash‑equivalent balances
For example, funds held in your Cloudfloat wallet that chose to assign as security for a facility.
Trade receivable invoices originated on the Cloudfloat platform
Approved and enforceable invoices owed to you by your customers, created or onboarded through Cloudfloat.
Cloudfloat can recognise a portion of these receivables as collateral to support your limit, subject to eligibility criteria such as debtor quality, aging, and dispute status.
Contracts and agreements
Certain contracts (for example, recurring service agreements or purchase orders) may be taken into account where they create a reliable right to future cash flows.
These are typically supported by assignment or security wording in Cloudfloat’s documentation.
Cloudfloat may apply internal “haircuts” or limits to different collateral types (for example, recognising only a percentage of the face value of receivables) so that only conservative, reliable value is used to support your borrowing limit. This helps protect both Cloudfloat and its customers and supports responsible, sustainable lending practices.
When Cloudfloat may ask for security or collateral
Cloudfloat may require security or collateral when you request a significant increase to your existing limit.
In every case, Cloudfloat’s team will:
Explain what is being requested and why.
Outline the type and amount of security or collateral required.
Provide clear documentation for you (and your advisers) to review and sign before any change to your limit takes effect.
If you have questions about a proposed security or collateral arrangement, you should seek independent legal or financial advice before signing.