Business Line of Credit from 7.49% p.a.

How a Business Line of Credit Works

A business line of credit provides your business with a pre-approved credit limit that you can draw upon at any time without needing to reapply. Unlike a term loan that gives you a lump sum upfront, a line of credit acts as a pool of available funds that you access only when needed. This makes it the most flexible form of business finance available.

When you draw funds from your line of credit, you start paying interest on the drawn amount from that day. As you repay the principal, the available credit replenishes, ready to be drawn again. There is no need to apply for a new loan each time you need funds — the facility remains available throughout its term.

For example, if you have a $200,000 line of credit and draw $50,000 to purchase stock, you pay interest only on $50,000. When the stock sells and you repay the $50,000, your full $200,000 limit is available again. If you then need $80,000 for a different purpose, you simply draw from the same facility.

Benefits of a Business Line of Credit

The primary benefit is flexibility. Unlike a term loan with fixed repayments whether you need the money or not, a line of credit adapts to your actual business needs. You never pay interest on money you are not using, which makes it significantly more cost-effective for variable funding requirements.

Lines of credit are also valuable for managing uncertainty. Rather than trying to predict exactly how much funding you will need and for how long, you set up a facility with a sufficient limit and use it as circumstances dictate. This gives you the ability to respond to opportunities and challenges without the delay of applying for new finance.

For growing businesses, a line of credit provides a scalable funding base. As your revenue increases, you can request limit increases, expanding your available capital in line with your business growth. This is much more efficient than applying for successively larger term loans.

Common Uses for Business Lines of Credit

Australian businesses use lines of credit for a wide range of purposes. The most common applications include:

• Working capital management: Smoothing cash flow between customer payments and business expenses
• Stock and inventory: Purchasing stock ahead of busy periods and repaying as it sells
• Seasonal businesses: Funding operations during quiet seasons and repaying during peak trading
• Opportunity funding: Having capital ready to act on time-sensitive business opportunities
• Project bridging: Covering costs at the start of projects before progress payments arrive
• Emergency buffer: Maintaining access to funds for unexpected expenses or opportunities

Eligibility and How to Apply

To qualify for a business line of credit, you typically need a registered ABN active for at least 12 months, consistent monthly revenue of $10,000 or more, a clean personal and business credit history, and clear business bank statements showing healthy cash flow. For secured facilities, you will need property or assets to offer as collateral.

The application process through our brokerage involves completing a short online form, providing business bank statements and basic identification, and letting us match you with the most suitable lender. For unsecured lines, approval can be as fast as 24 to 48 hours. Secured facilities involving property typically take 1 to 2 weeks due to the valuation process.

We recommend applying for a limit higher than your immediate need to ensure you have capacity for unexpected requirements. Having an unused line of credit costs very little (usually a small annual facility fee) but provides significant peace of mind and business agility.