Business Line of Credit: A Flexible Alternative to an Overdraft

No. A line of credit usually offers a larger business funding limit and different repayment and security terms. A credit card is primarily a payment product with a revolving balance.

It depends on the product. Interest is commonly charged on funds used, while separate line, account or service fees may apply to the approved limit. Read the full fee schedule.

You can in some facilities, but term asset finance is often a better match for equipment because repayments can be aligned to the asset’s useful life.

It can be an alternative where the structure, cost and conditions fit. The comparison should include security, fees, renewal risk and how quickly the balance is expected to reduce.

It depends on the lender, fees, limit, security, repayment rules and how often you need to draw funds. A line of credit can be easier to manage where the business needs a separate revolving facility rather than an account overdraft.

Yes, many businesses compare a line of credit when a bank overdraft is unavailable, too small or too rigid. The facility should still match the cash-flow cycle.

Common checks include turnover, bank conduct, ATO position, existing debts, trading history, security and whether repeated drawdowns will be repaid from normal business cash flow.