Business line of credit

A business line of credit is the simplest way to keep funding ready for when the business calls on it. You are approved for a limit once, then use it as the business needs it: draw $15,000 for wages in a quiet fortnight, repay it when the big invoice lands, draw again before the next stock order. No new application each time.

How does a business line of credit work?

The lender approves a maximum limit. You draw from it by transfer into your business account, either in one go or in pieces. The balance you owe goes down as you make repayments and the amount available goes back up. Interest is generally charged on the drawn balance only, although many facilities also carry an establishment fee and sometimes an ongoing line fee.

Unsecured lines for trading businesses typically sit between $5k and $500k. Businesses that own property can secure a larger facility against it.

Who gets the most out of a line of credit?

Lines of credit suit businesses whose cash arrives unevenly but reliably:

• Trades and construction businesses waiting on progress claims.
• Wholesalers and distributors paying suppliers before retailers pay them.
• Hospitality and tourism operators with strong and weak seasons.
• Professional firms with lumpy client billing.
• Any business that keeps a buffer for late payers and surprise bills.

If your need is a single purchase with a clear payback, a fixed working capital loan is usually simpler.

Want a person to look at your numbers? The 60-second enquiry runs no credit check, and the person who reads it is the person who calls you back.

What does a line of credit cost?

Because pricing depends on the business, we do not quote rates. What matters in practice is the total cost of the facility over a year, which has two parts:

Cost type	What to ask
Cost of using it	What is charged on the drawn balance, and how is it calculated?
Cost of having it	Are there establishment, line or annual fees on the full limit?
Cost of leaving it	Are there exit or early closure fees?

A line you dip into for a few weeks at a time can be good value. A line that sits fully drawn all year usually is not, and our guide to line of credit mistakes explains why.

Line of credit, overdraft or loan?

An overdraft is a type of revolving credit attached to a transaction account, and banks often want property security for it. A non-bank business line of credit can be unsecured and assessed on bank statements. We compare them in overdraft vs line of credit.

Setting a sensible limit

Look at your lowest balance across the last year and the size of the gap in your worst month. The limit should cover that gap with some room to spare, not the whole year’s expenses. A good line spends much of its life lightly drawn.

In a nutshell

• Draw what you need, when you need it, up to an approved limit
• Repay as cash comes in, then redraw without a new application
• Interest generally charged only on the drawn balance, plus any fees
• Suits uneven cash flow better than a one-off loan

How we work through it with you

Everything starts with a short enquiry: how much, what for, how long you have traded, roughly what you turn over and whether there is property in the picture. A person, not a scoring engine, reads it and calls you. They ask for the evidence that actually decides the loan, explain the realistic options and give you the full cost in writing. Nothing goes ahead, and no credit check is run, until you say yes. On a complete file, approval within the hour is possible. Every step is explained as it happens, so you always know what is being checked and why.

Before you send the enquiry

A short checklist before you send the enquiry. None of it takes long, and together it heads off the most common causes of delay:

• Know the amount you need and what it will pay for.
• Check your recent bank statements so nothing in them surprises you.
• Note any loans, leases or payment plans the business is carrying.
• If you own property, know who is on the title and what is owed.
• Make sure every director or co-owner knows you are applying.

A quick word on the enquiry form

Late surprises are what slow funding down. A second property owner nobody mentioned, turnover that is lower in the statements than on the form, an amount that doubles after the first call: each one sends the assessment back to the start. If you tell us the full story at the beginning, even the awkward parts, the file only has to be worked through once.

Your next step

If this sounds like your business, start the enquiry. It takes about 60 seconds and runs no credit check. Your details are not sprayed across the market; the team that reads your enquiry is the team that works on it. Please give real numbers rather than hopeful ones. A clear picture of turnover, credit history and property lets us point you to the right funding straight away.