A business line of credit gives you an approved limit that you can draw from whenever you need capital - and you only pay interest on what you actually use. It's the most flexible form of business finance available. OverdraftMe compares lines of credit from 50+ lenders to find the right fit for your business.
Need a line of credit?
Get an instant estimate in 60 seconds. No credit check. No obligation.
Get my free quote - 60 seconds →How a business line of credit works
Think of it like a credit card with much lower rates and no merchant surcharges. You get approved for a limit - say $100,000. You can draw $20,000 this week for stock, repay it when your invoice clears, then draw $50,000 next month for a supplier payment. Interest is only ever charged on the amount you've drawn, not your total limit.
Unlike a term loan where you receive a lump sum and start paying interest immediately on the full amount, a line of credit costs you nothing when you're not using it (aside from a small annual line fee). This makes it dramatically cheaper for businesses with variable cash flow needs.
Who is a line of credit best for?
Seasonal businesses
Hospitality, retail, tourism - draw during slow months, repay when revenue picks up. No cost during peak season if you don't need it.
Project-based businesses
Construction, trades, consulting - fund materials and labour upfront, repay when the project settles.
Variable cash flow
Invoice gaps, late-paying clients, unpredictable revenue cycles. A line of credit smooths the bumps.
Growing businesses
Need capital on standby for opportunities? A line of credit means you can move fast without reapplying.
Line of credit vs overdraft vs loan
| Feature | Line of Credit | Business Overdraft | Business Loan |
|---|---|---|---|
| How it works | Revolving, standalone facility | Revolving, linked to bank account | Lump sum, fixed repayments |
| Interest | Only on drawn amount | Only on drawn amount | On full loan from day 1 |
| Term | 1-3 years (renewable) | Up to 5 years | 3-24 months |
| Amount | $20K - $500K | $10K - $500K | $10K - $500K |
| Rates from | 13% p.a. | 14.55% p.a. | 12% p.a. |
| Best for | Variable spending, flexibility | Ongoing cash flow buffer | One-off capital need |
What you need to apply
- 6 months business bank statements (PDF from your internet banking)
- Valid ABN (registered and active)
- Driver's licence (for identity verification)
No tax returns. No financials. No business plan.
Eligibility and how fast you can get funded
| Criteria | Requirement |
|---|---|
| Trading history | 6+ months in Australia |
| Monthly revenue | $6,000+ per month |
| Business type | Sole trader, partnership, company, trust |
| Credit score | Equifax 550+ (flexible with non-bank lenders) |
| Security | Not required under $150K |
| Facility range | $20,000 - $500,000 |
| Decision speed | From 1 hour |
| Funding speed | Same day available |
Frequently asked questions
How does a business line of credit work?
A business line of credit gives you an approved limit (e.g. $100K) that you can draw from whenever you need. You only pay interest on what you actually use. As you repay, the available balance refreshes and you can draw again - similar to a credit card but with much lower rates and no merchant surcharges.
What's the difference between a line of credit and an overdraft?
They're similar revolving products. An overdraft is typically linked directly to your business bank account and lets you go into negative. A line of credit is usually a standalone facility you transfer funds from. Lines of credit often offer slightly lower rates (from 13% p.a.) and may have different draw mechanics.
Who is a business line of credit best for?
Lines of credit are ideal for businesses with variable or seasonal cash flow - construction, hospitality, retail, professional services. If your spending needs fluctuate month to month, a line of credit gives you flexibility without paying for capital you don't use.
How much can I get with a business line of credit?
Business lines of credit through OverdraftMe range from $20,000 to $500,000. Your approved limit depends on monthly revenue, trading history and credit profile. Most lenders offer 1-2x your average monthly turnover.
Do I need property security for a line of credit?
No property security is required for facilities up to $150,000. For larger facilities, some lenders may request property as security, but unsecured options are available depending on your profile.
Ready to get flexible finance?
Get a quote in 60 seconds. No credit check, no commitment. Or call John directly on 02 8046 3933.
Get my free quote →