Business Line of Credit

A business line of credit is a flexible finance facility that gives your business access to funds up to an approved limit. Instead of receiving the entire amount upfront, you can draw funds when needed, repay them and potentially access them again during the life of the facility.

Once approved, your business receives a credit limit that can be accessed when required. You only draw the amount you need rather than borrowing the entire limit upfront. As funds are repaid, they may become available to use again, subject to the terms of your facility.

Your approved limit depends on factors such as business turnover, cash flow, trading history, credit profile, existing commitments and whether security is available. We compare suitable options across our panel of 80+ banks and non-bank lenders to find a limit and structure suited to your business.

Eligible businesses can receive a same-day decision, with same-day funding available up to $500,000 for qualifying applications. Many other approved facilities can be available within 24–48 hours, depending on the lender, amount, documentation and complexity of the application.

Rates vary depending on the lender, approved limit, business turnover, trading history, credit profile and whether the facility is secured. We compare rates, fees and facility structures across suitable lenders to help find a competitive option for your circumstances.

Generally, interest is charged on the amount you have drawn rather than your entire approved credit limit. However, establishment, account, line or other facility fees may also apply depending on the product. Always compare the total cost of the facility, not just the interest rate.

A business line of credit can be used for a wide range of legitimate business purposes, including working capital, wages, supplier payments, stock and inventory, tax obligations, unexpected expenses, seasonal costs and short-term growth opportunities.

Not necessarily. Unsecured business lines of credit are available for eligible businesses without residential or commercial property security, although guarantees may still be required. Secured facilities may provide access to larger limits or more competitive pricing.

Potentially. Some lenders offer low-doc or streamlined facilities without requiring a complete set of financial statements or tax returns. They may instead assess business bank statements, turnover, accounting data, ABN and GST history and your credit profile.

Potentially. Having an ABN is an important starting point, but it doesn't guarantee approval. Lenders may also consider your trading history, turnover, business bank transactions, GST registration, credit profile and ability to repay.

Potentially. Previous credit issues don't automatically rule you out. Some lenders may place greater emphasis on current turnover, cash flow and trading performance, although your credit history can affect the available limit, rate, fees and terms.

Potentially. Some lenders consider newer businesses and start-ups, although established businesses generally have access to more options. Your current revenue, industry experience, credit profile and overall financial position can influence eligibility.

A business loan generally provides a lump sum that is repaid over an agreed term. A line of credit provides ongoing access to an approved limit, allowing you to draw funds as required and potentially reuse available credit after repayments. A term loan can suit a defined purchase or expense, while a line of credit can be better suited to recurring funding needs.

Both provide flexible access to working capital, but they are structured differently. A business overdraft is generally linked to a transaction account and allows the account balance to fall below zero up to an approved limit. A line of credit is typically a separate finance facility that you draw from when required.

A working capital term loan generally provides an agreed lump sum for business expenses and is repaid over a set period. A line of credit provides a reusable limit, making it particularly useful when the timing or amount of your working capital needs changes throughout the year.

It can be. A line of credit provides a financial buffer that can help bridge temporary gaps between money coming into your business and expenses that need to be paid. This can be useful for businesses with seasonal revenue, long customer payment terms or fluctuating operating costs.

Yes. A line of credit can be used to purchase stock or inventory, allowing you to fund supplier orders without using all of your available cash. You can then repay the facility as inventory is sold and revenue comes into the business.

Yes. Business lines of credit are commonly used for short-term operating expenses such as payroll, supplier invoices, rent and other day-to-day business costs.

Potentially. A business line of credit may be used for eligible tax obligations, subject to lender criteria and the terms of the facility. Whether this is the right structure will depend on the size of the debt, your cash flow and how quickly you expect to repay the amount drawn.

Repayment requirements vary between facilities. You may be required to make minimum repayments, pay interest and fees periodically, or reduce the outstanding balance according to agreed terms. Because the facility is revolving, repaid amounts may become available to draw again.

Unlike a standard term loan, a line of credit doesn't necessarily have a fixed repayment term for each dollar borrowed. Facilities may be ongoing or provided for an agreed period and can be subject to renewal, review, minimum repayment requirements or other conditions.

Potentially. As your business grows, you may be able to request a higher credit limit. The lender will generally reassess factors such as turnover, cash flow, trading performance, existing debts and credit profile before approving an increase.

Because a line of credit is a revolving facility, you can generally reduce the outstanding balance by making repayments. Conditions around closing the facility, additional repayments and fees vary between lenders, so the specific terms should always be checked.

It can. Depending on the facility, fees may include establishment, account, annual, monthly, drawdown or other charges. A facility with a lower advertised interest rate isn't necessarily cheaper overall, so we compare the rate, fees and structure when assessing your options.

Getting an initial quote with Overdrive does not require an upfront credit check. We can assess your requirements and compare suitable options before progressing to a formal application. If you choose to proceed, the selected lender may conduct a credit enquiry as part of its assessment.

Eligible Australian businesses with an ABN can apply, including sole traders, partnerships, companies and trusts. Eligibility depends on factors such as turnover, trading history, cash flow, credit profile, existing commitments and ability to repay.

A line of credit can be suitable if your business has recurring or unpredictable funding requirements and you want flexible access to working capital without taking out a new loan each time. For a large one-off expense with predictable repayments, a term loan may be more appropriate. We compare both structures to help find the right fit.