Do you pay interest on the full credit limit?

No. Interest is generally charged on the amount you have drawn, not the full approved limit. This can make a business line of credit more cost efficient for businesses that need access to funds without using the full facility all the time.

What can a business line of credit be used for?

A business line of credit is commonly used for short term and repeatable working capital needs such as managing cash flow gaps, paying wages, super and suppliers, covering BAS, GST, PAYG or other tax obligations, buying stock ahead of busy periods, handling unexpected business expenses, and bridging the gap between invoicing customers and receiving payment.

What are the benefits of a business line of credit?

Key benefits can include paying interest only on the amount used, flexible repayments, support for short term working capital needs, preserving long term borrowing capacity, and choosing between secured and unsecured options depending on your business needs.

What types of business lines of credit are available in Australia?

Available options can include standard business lines of credit, overdrafts, equipment lines of credit, invoice finance facilities, and import or trade finance facilities. Depending on the lender, these may be offered on a secured or unsecured basis.

What is the difference between a secured and unsecured business line of credit?

A secured business line of credit uses property or other acceptable assets as security, which can allow for higher limits and lower pricing. An unsecured business line of credit does not require property security and is usually assessed using factors such as cash flow strength, trading history and credit profile, although limits may be lower and rates may be higher.

Who is eligible for a business line of credit?

Eligibility varies by lender and facility type, but lenders commonly assess your business revenue and cash position, trading history, creditworthiness and whether any security is available. For unsecured options, many lenders prefer at least 1 year of trading history, while secured facilities usually require proof of ownership for the asset being offered as security.

How quickly can a business line of credit be approved?

Some lenders can approve and fund unsecured business lines of credit within 24 to 48 hours, depending on the application, the documentation required, and the lender’s process.

Last Updated: April 14, 2026

Business Line of Credit in Australia

Q: What is a business line of credit?

A business line of credit is a flexible funding facility that gives a business access to funds up to an approved limit. Instead of receiving a lump sum upfront, the business draws only what it needs, repays it, and can draw again as needed.

Q: How does a business line of credit work?

Once approved, the lender sets a maximum limit. You can draw part or all of the available funds, repay some or all of the balance, and then draw again. Because it is a revolving facility, your available credit refreshes as repayments are made.

Get flexible access to funding when your business needs it. Cover cash flow gaps, have the working capital you need, and invest in growth with the right funding.

Draw from a pre approved limit at any time*
Revolving credit facility that you can use and repay as needed*
Get limits from $10,000 up to millions*
Approvals within 24-48 hours

How to Apply for a Business Line of Credit with Dark Horse Financial

Contact Our Team

Fill out our online form to apply for a Business Line of Credit. One of our specialists will get in touch with you fast to understand your situation and make a recommendation.

Submit Application

We’ll expertly handle your application from start to finish. Some lenders can approve and fund unsecured lines of credit within 24-48 hours.

Get Funded

Once approved, documentation is signed electronically, making settlement fast. Once settled, you can get access to your line of credit facility immediately.

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What is a Business Line of Credit in Australia?

A business line of credit in Australia is a flexible funding facility that allows a business to access money up to an approved limit whenever it is needed. Instead of receiving a lump sum upfront, you draw funds only when required. When repayments are made, the available limit refreshes, which is why it is called a revolving credit facility.

This structure suits businesses who bill on end of month terms, have uneven cash flow, seasonal revenue, or regular short term expenses that don’t justify taking out a new loan each time. Many businesses in Australia use a business line of credit to manage payroll timing, supplier invoices, and tax obligations.

How Does a Business Line of Credit Work?

Once the line of credit is approved, the lender sets a maximum limit. You can draw part or all of it, repay some or all of the balance, and then draw again. Interest is calculated on the daily balance, not the full limit.

For example, if your approved limit is $300,000 and you draw $80,000, interest only applies to the $80,000. When you repay $30,000, your available credit increases to $250,000. The difference between your balance and your limit is your available credit.
This is different from a standard loan where all funds are deposited in full and interest applies to the full amount from day one.

What Can You Use a Line of Credit For?

A business line of credit works best when it is used for short term, repeatable needs rather than large one off purchases. Below are the most common and practical ways Australian businesses use these facilities.

Managing cash flow gaps caused by slow paying customers or uneven monthly income.
Covering wages, super, and supplier payments.
Paying BAS, GST, PAYG, or other tax obligations.
Purchasing stock or materials ahead of busy trading periods or seasonal demand.
Handling unexpected expenses such as urgent repairs or equipment breakdowns.
Bridging the gaps between issuing invoices and receiving payment.
Acting as a standby safety net used whenever needed.

Benefits of a Business Line of Credit

Pay Interest Only on What You Use

Interest is charged on the drawn balance, not the approved limit. This makes a line of credit more cost efficient for businesses that need access to funds but do not require them all the time.

Flexible Repayment Structure

Most facilities allow repayments to fluctuate based on cash flow. You can reduce the balance faster during strong months and draw again when trading slows.

Supports Short Term Working Capital Needs

Lines of credit are well suited to wages, supplier payments, tax obligations, and stock purchases. They are designed for day to day business funding rather than long term asset purchases.

Preserves Long Term Borrowing Capacity

Using a line of credit for short term needs can prevent you from locking long term loans into purposes they were never designed for. This helps keep future borrowing options open.

Secured And Unsecured Options Available

Businesses can choose between secured facilities with lower pricing or unsecured options that protect property equity. This flexibility allows the structure to match the business’s risk tolerance.

Acts As A Financial Safety Buffer

Even when unused, a line of credit provides confidence. Knowing funds are available can reduce stress and allow better decision making during quieter periods or unexpected events.

Types of business lines of credit available in Australia

Not all lines of credit work the same way. Understanding the main types helps you choose a structure that actually fits how your business operates.

Business lines of credit

A standard business line of credit gives flexible access to funds up to an approved limit.
Secured business lines of credit use property or other acceptable assets as security. This usually allows for higher limits and lower pricing.

Unsecured business lines of credit do not require property security. Approval is based on cash flow strength, trading history, and credit profile. Limits are generally lower and rates higher, but the process is faster, better for quick needs.

Overdrafts

An overdraft is linked directly to a business transaction account. It allows the account balance to go below zero up to an agreed limit.

Secured overdrafts are backed by property or other business assets and usually come with lower rates and higher limits.

Unsecured overdrafts are approved based on cash flow, trading history, and credit score. They are commonly used for short term gaps such as wages, rent, or supplier payments.

Equipment lines of credit

An equipment line of credit is designed for businesses that regularly purchase plant, machinery, or vehicles.

Instead of applying for new finance every time equipment is needed, the business can draw from the approved limit as purchases arise. The equipment itself is often used as security, which can keep pricing competitive.

This structure suits construction, transport, manufacturing, and trades based businesses with ongoing asset needs.

Invoice finance facilities

Invoice finance works like a revolving credit facility backed by unpaid invoices. Funds are advanced against eligible invoices, improving cash flow while waiting for customers to pay.

This option suits businesses that invoice other businesses and operate on longer payment terms.

Import and trade finance

Import and trade finance provides a revolving line of credit to fund the purchase of goods from local or overseas suppliers.

It allows businesses to pay suppliers upfront while giving extra time to repay the facility once goods are sold. This structure is commonly used by importers, wholesalers, and businesses with global supply chains.

Business Line of Credit Eligibility in Australia

Eligibility varies between lenders and the type of line of credit you’re applying for.

For unsecured facilities, many lenders will assess using only a read only view of business bank account statements. For secured facilities, lenders will need to see documentation proving ownership of the asset.

Here’s usually what lenders want to see:

Revenue and Cash Position: Lenders will want to see your average cash position over a certain period to confirm that you have enough and steady cash flow to repay the line of credit.
Trading history: For unsecured options, many lenders prefer businesses with at least 1 year of trading history.
Creditworthiness: Many lenders require an acceptable credit score of at least 500 and above.
Security: Lenders will want to see proof of ownership of assets or property for secured lines of credit

If you want to know if you’re eligible for a business line of credit, contact our team for an assessment.

Business Line of Credit Rates and Fees

In 2026, business line of credit rates and fees depend on security, risk profile, and lender. Secured facilities generally sit at the lower end of the range, while unsecured options price higher due to increased risk.

Generally, rates for 2026 are:

Business Lines of Credit: Start at 7%
Unsecured Business Overdrafts: Start at 7.5% to 20%+ at some non bank lenders
Secured Business Overdrafts: Start at 7%
Equipment Finance: Starts at 5% to 15%+
Invoice Finance: Interest on funds drawn starts at 8%

Fees can include establishment costs, line fees, facility fees, and annual fees. Contact our team to get the lowest possible rates for your line of credit with no fees

Business Line of Credit vs. Traditional Loans

When looking for finance, businesses can choose between a line of credit or a traditional business loan. While many businesses use a combination of both, it’s still important to understand the differences between the two:

Feature	Business Line of Credit	Traditional Business Loan
How funds are accessed	Draw funds as needed up to an approved limit	Full loan amount disbursed upfront
Interest charged on	Only the amount drawn	Full loan amount from day one
Repayment structure	Flexible, balance can go up and down	Typically fixed minimum repayments on a set schedule
Reuse of funds	Yes, repayments restore available limit	No, must reapply to borrow again
Best suited for	Cash flow gaps, wages, stock, short term needs	Asset purchases, expansion, long term investment
Impact on cash flow	Depends on usage	Fixed regular commitment
Security options	Secured and unsecured options available	Secured or unsecured options available
Approval speed	Unsecured options can be approved in 24 hours. Secured options take longer.	Unsecured options can be approved in 24 hours. Secured options take longer.
Risk if misused	Can become ongoing debt if not managed	Predictable repayments

Choose a business line of credit when

✓ Your cash flow fluctuates month to month
✓ You need funding in smaller amounts at different times
✓ You want to pay interest only on what you actually use
✓ Expenses repeat, such as wages, tax, suppliers, or stock
✓ You want access to funds without reapplying each time
✓ You need a buffer for timing gaps rather than a large lump sum
✓ You plan to repay and redraw funds as cash flow improves

Use a traditional business loan when

✓ You need a one off lump sum upfront
✓ The purpose is clear and fixed, such as equipment, property, or expansion
✓ You prefer set repayments and certainty over flexibility
✓ You expect to use the full loan amount immediately
✓ The expense will deliver long term value over several years
✓ You want predictable costs and a defined end date
✓ You are funding an asset rather than day to day operations

Real World Business Line of Credit Success Stories

Case Study 1: Power tools sales and service business

This client was referred by their financial advisor. They operate a business selling and servicing power saws and other tools and needed $100,000 quickly to cover an immediate requirement.

The owner initially assumed a short term business loan would be the answer but wanted guidance on choosing the right structure. After reviewing how the business operated and how often funding gaps appeared, it became clear that a revolving credit facility would be more suitable than a one off loan.

A non bank business line of credit was recommended. It came with no establishment fees, supported ongoing working capital needs, and provided a longer term solution than most unsecured term loans.

Based on an assessment of the business bank account statements, the application was approved within 24 hours. The lender offered a $250,000 limit, well above the original request, giving the business flexibility not just for the immediate need but for future opportunities as well.

The result was a strong outcome for the business and a facility that could be reused without reapplying each time cash flow tightened.

Case Study 2: Property maintenance services business

This client runs a property maintenance service business carrying out repairs and improvements for residential properties at the request of managing real estate agents. Cash flow fluctuates due to the timing of jobs and payments, which made budgeting difficult.

Because the business owner did not own residential or commercial property, there was no security available. The owner initially explored invoice finance, but this option was not suitable. Their debtors were individual property owners rather than Australian businesses, which ruled out invoice based funding.

At first, the client believed a business line of credit was out of reach without property security. In reality, unsecured business funding has evolved significantly, and unsecured lines of credit are now available for businesses with the right cash flow profile.

After selecting a lender that matched the client’s trading pattern and risk profile, an application was submitted. Approval was granted within 24 hours for a $50,000 unsecured line of credit.

Get an Estimate on Your Business Line of Credit

Want to know how much a business line of credit could potentially cost you? We developed a calculator that can help you estimate your costs if you plan on making regular repayments instead of lump sums.

How to Use:

Input your loan amount or how much you want to draw
Enter your interest rate
Choose your loan term
Select your payment frequency (weekly or monthly)
Click “See Repayment Schedule”

You can copy the link to your results or download them as a CSV file.

Business Line of Credit FAQs

What can I use a business line of credit for?

A business line of credit is ideal for short term immediate needs. You can cover payroll, operational expenses, and any other business expenses. A line of credit is also a great way to prepare for setbacks like an unexpected expense or to support the working capital required to take on new contracts.

How is interest applied to a line of credit?

Interest is charged only on your outstanding balance. For instance, if you borrow $30,000 out of your $100,000 limit, you will only be charged interest for the $30,000. Some lenders will capitalise fees, which means they add them to your outstanding balance which means interest could also apply to fees.

What is the biggest benefit of having a line of credit?

The biggest benefit of a business credit line is flexibility. You can get immediate funds to cover day to day expenses. Once you repay borrowed funds, your limit will be restored. This flexibility offers businesses convenience and security to keep things running despite setbacks.

How do I qualify for a business line of credit?

Eligibility criteria for a business line of credit differs from lender to lender but can accommodate established businesses as well as those who don’t have financials. Typically, you will need a credit score of at least 500 and can demonstrate that you can repay the line of credit. For unsecured lines of credit, a read only view of your business bank account statements can help lenders understand your revenue and average cash position over the past 6 months, which will determine how much you can realistically borrow.

What's the application process for a business line of credit?

The requirements for obtaining a business line of credit can vary depending on the lender and the type of line of credit you’re applying for. Unsecured applications up to $1,000,000 can be done in minutes over the phone and require no documents. Applications for a bank overdraft will require full financials and tax records and take longer to get approved but will have the lowest rates. Invoice finance and bank lines of credit will typically require financials, tax portals and other documents.

What happens if you don't use your line of credit?

If you have no extra expenses for the time being, you can simply not use your line of credit. Most lenders allow you to keep a line of credit as a backup. Some lenders will charge monthly fees and line fees even if you’re not using your line of credit. If you don’t anticipate needing your line of credit often or if it’s just for peace of mind we typically recommend a line of credit with no or low fees to minimise costs until its needed.

How long do I have to pay back a line of credit?

The amount of time it takes to pay back your line of credit depends on the lender’s policy. Some lines of credit amortise over short periods, whereas others will have a minimum direct debit repayment that pays the balance down over 5 years and some will have interest only periods that don’t require the balance to be paid back. In all cases, you can always make more payments above the minimum.

Can you close a line of credit?

Yes, you can close your line of credit. If you’re not using your facility, you can typically close it by notifying your lender and paying your outstanding balance and other required fees. Some lines of credit will have minimum contract terms – invoice finance is a good example of this – and there may be fees associated with closing your line of credit before the end of the minimum contract period.

Can you increase your line of credit limit?

It is possible to increase your line of credit limit if business performance warrants an approval for a higher limit. Limit increases depend on a lender’s policy and your capacity to service a higher balance. We recommend our clients speak to us before a limit increase to maximise your chances of approval.

* To approved applicants only

Disclaimer: Loans and the benefits associated with them are only available to those who have been approved. The information provided on this page is general and does not consider your individual circumstances. It is not meant to serve as a substitute for professional advice, and you should not rely on it for any decisions. Always consult with a professional regarding finance, tax, and accounting matters before making any choices or taking action.