Draw, repay and reuse business funding for cash-flow gaps, stock, suppliers and unexpected expenses.
A construction business needed payroll and supplier cover between progress payments. Its new ABN missed standard criteria, so prior sole-trader history was used to prove continuity and secure a revolving facility.
The benefit is access and re-use. The cost depends on the lender's drawn-balance interest, line fees, draw fees and repayment mechanics.
Use part of the approved limit rather than taking the full amount upfront.
Many facilities replenish as principal is repaid, subject to lender terms.
Useful for recurring gaps such as stock, payroll, supplier and seasonal cycles.
Lender availability depends on the finance purpose, applicant profile and lender assessment.
The right structure depends on whether the need is recurring and how quickly cash comes back.
| Structure | Best suited to | Watch for |
|---|---|---|
| Line of credit | Recurring or unpredictable working-capital needs | Line fees, draw fees, review conditions and repayment rules. |
| Term loan | Defined one-off purpose with a known repayment horizon | Interest on the whole balance from settlement. |
| Overdraft | Transactional working-capital linked to banking relationship | Bank covenants, reviews, security and availability. |
Many business line-of-credit products calculate interest on the drawn balance, but fees and structures vary by lender. Compare the full cost, not just the interest calculation.
Some lenders offer unsecured or non-property-secured facilities, subject to limits, trading history, conduct and credit assessment.
Not automatically. A line suits recurring access; a term loan can be cleaner for a defined one-off purpose.
Start with the amount, purpose and business profile.