Cash flow gaps are a reality for almost every business. Seasonal downturns, slow-paying clients, unexpected expenses — these can all leave a business short at the wrong time. A business overdraft or line of credit provides a revolving facility you can draw on and repay as needed, giving you a financial buffer without the cost of a full term loan.
What Is a Business Overdraft?
A business overdraft is a revolving credit facility attached to your transaction account. You're approved for a maximum limit and can draw up to that limit at any time. Interest is only charged on the balance drawn — not the full limit — and repayments are flexible, meaning you repay as funds come in. Business overdrafts in Australia are often called lines of credit, revolving credit facilities or working capital lines.
How Does a Line of Credit Differ from a Business Loan?
A term business loan provides a lump sum that you repay in fixed instalments over a set period. A line of credit is flexible — you draw and repay as needed, and interest only accrues on what you use. Lines of credit are better suited to ongoing working capital needs, whereas term loans suit one-off purchases or projects with a defined cost.
How Much Can I Access?
Business overdraft limits in Australia typically range from $20,000 to $500,000 for unsecured facilities, with larger secured lines available up to $5 million. Limits are set based on your business turnover, trading history and credit profile. Overdrive Funding matches you with lenders whose limits suit your actual business size.
What Does a Business Overdraft Cost?
Rates on business lines of credit vary from around 8% to 25% per annum depending on the lender, whether the facility is secured or unsecured, and your business risk profile. Most facilities also charge a small monthly or annual line fee. Overdrive Funding compares the total cost of each product — rate plus fees — so you know exactly what you're paying before you commit.
What Do I Need to Apply?
For an unsecured business overdraft you'll typically need: a valid ABN with 6–12 months of trading, 3–6 months of business bank statements, and basic personal and business ID. No property security is required for most facilities up to $250,000. Our brokers guide you through the documentation and submit the application on your behalf.
How Quickly Can a Line of Credit Be Set Up?
Many non-bank lenders can approve and activate a business line of credit in 24–48 hours. Once active, you can draw immediately. This is significantly faster than a bank overdraft, which can take 2–4 weeks and requires a formal bank relationship.
Is a Business Overdraft Right for My Business?
A line of credit suits businesses with variable or seasonal revenue who need flexible access to funds rather than a fixed loan. It's particularly useful for businesses that invoice on net-30 or net-60 terms, experience seasonal slowdowns, need to cover payroll or supplier payments between invoices, or want a financial buffer without paying interest when not needed.