John Pierre Saliba
Director, OverdraftMe | ACL 511092
Specialist business finance broker since 2017, $700M+ facilitated for Australian SMEs. MFAA Member, AFCA Member.
By John Pierre Saliba · April 2026 · OverdraftMe
Last reviewed: 30 October 2026 · Written by John Pierre Saliba, Director, OverdraftMe
A business overdraft suits a seasonal business because you draw only in the quiet months and pay interest only on the drawn balance. Size it at your worst month's shortfall plus a 20% buffer, usually one to two months of operating costs, from $10,000 to $500,000 across 50+ lenders, with no tax returns under $150,000.
If your revenue swings between feast and famine - construction shutdowns in January, hospitality quiet in winter, retail dead between Easter and Christmas - you know the pain of trying to cover fixed costs when revenue drops. Wages, rent, insurance and supplier payments don't stop just because customers do.
A business overdraft gives you a permanent cash buffer. You draw during the quiet months and repay during the busy ones. No loan-style fixed repayments (lender minimums may apply), no reapplication - just a revolving facility that flexes with your business cycle.
Look at your last 12 months of bank statements. Identify your worst month - the month where expenses exceeded revenue by the most. That gap is your minimum overdraft requirement. Add 20% buffer for unexpected costs. That's your target facility size.
For most seasonal businesses, a facility of 1-2 months' operating expenses provides adequate cover. For a business spending $40,000/month on wages, rent and supplies, that means a $40,000-$80,000 overdraft.
Without a cash buffer, seasonal businesses often resort to putting expenses on personal credit cards (25%+ interest), delaying supplier payments (damaging relationships), or skipping super payments (now more dangerous than ever with Payday Super penalties since July 2026).
A business overdraft at 15-20% p.a. on drawn funds - where you only pay for what you use - is almost always cheaper than the alternative.
A Gold Coast cafe banks $75,000 a month from September to April and about $35,000 a month from May to August. Fixed costs run $45,000 a month all year. The owner sets up a $60,000 unsecured business overdraft in August, draws $40,000 across the four winter months at an indicative 18% p.a., and repays it in full by the end of October.
| Funding option | What it costs over the year | What it does to cash flow |
|---|---|---|
| $60,000 overdraft, $40,000 drawn for 4 months | Interest about $2,400 ($40,000 x 18% x 4/12) plus a $600 line fee: about $3,000 | Draw only in May to August, repay from spring trade, limit stays available next winter |
| $60,000 12-month business loan at 18% p.a. | Interest about $6,000 on a declining balance, repaid weekly all year | Full amount lands in August, repayments continue through the busy months when the cash is not needed |
| $40,000 on a personal credit card at 25% p.a. | Interest about $3,300 over 4 months, plus the risk of maxing out personal credit | Card limit rarely stretches to $40,000, and personal credit utilisation affects the next business application |
| No facility: delay suppliers and the ATO | General interest charge on tax debt is 11.51% p.a. and not deductible since 1 July 2025; supplier terms and credit insurance can be lost | Cheapest on paper, most expensive in practice |
The overdraft wins because interest only runs while the money is drawn, and the facility sits there for the following winter without a new application. Set it up in the busy season when your bank statements are strongest, not in the month you need it. If the gap is a known, one-off amount, compare a working capital loan instead.
Take the worst month in your last 12 months of bank statements, measure how far expenses exceeded revenue, and add a 20% buffer. For most seasonal operators that lands at one to two months of operating costs. Lenders size the limit at roughly 1 to 1.5 times average monthly revenue, so a business banking $40,000 a month is usually offered $40,000 to $60,000.
Only the line fee. Interest is charged on the drawn balance, so an undrawn facility costs the line fee of 0.5% to 2% p.a. on the limit and nothing else. On a $60,000 facility that is $300 to $1,200 a year for the certainty that the quiet season is covered.
Usually, yes. Non-bank lenders assess the average of your last 6 months of deposits rather than any single month, so a strong peak offsets a weak trough. Apply during or just after peak season when the statements look strongest, keep the minimum $6,000 a month average and an Equifax score of 550 or above, and every file is assessed case by case.
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