Business line of credit Australia
A business line of credit helps when cash flow gets tight
Cash flow gaps rarely arrive politely. One week everything is steady. Next week a customer pays late, a supplier wants payment early, and you are covering the difference.
That is why many business owners look at a business line of credit.
Not because they want “more debt”, but a safety buffer to protect the business.
A line of credit can sit in the background and only get used when it is needed.
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Last updated: January 2026
Written by CASEY, Australian business finance specialists
What a business line of credit is (simple definition)
A business line of credit is a flexible credit limit that a business can draw from when needed, repay, and reuse, typically to manage short-term cash flow timing gaps rather than fund one-off purchases.
Why a line of credit is different
A normal loan gives you a lump sum once.
A line of credit gives you an approved limit you can draw from when needed, then reuse as you repay.
It tends to suit businesses with ups and downs, rather than a one-time purchase.
What businesses use a line of credit for
Most businesses use it for timing gaps, not big dreams.
Common uses include:
Paying wages while waiting for customers to pay
Paying suppliers early to keep stock moving
Smoothing quiet seasons
Keeping a buffer, so you do not need a new short-term loan every time
How a business line of credit works
A business line of credit follows a simple cycle:
You’re approved for a credit limit (based on trading and cash flow)
You draw only what you need, when you need it
You repay the balance over time
As you repay, your available limit builds back up again
In most cases, interest applies only to the amount you’ve actually drawn, not the full approved limit.
This is why a line of credit is commonly used as a buffer for timing gaps, not as a one-off lump sum.
Business line of credit vs loan
This is the simple way to think about it.
A loan
One lump sum
Fixed repayments
Fixed term
A line of credit
A limit that sits there
Draw and repay as needed
Flexibility is the main value
If you only need money once for one clear purchase, a loan can make more sense.
If you need a buffer for timing gaps, a line of credit can make more sense.
Business line of credit vs overdraft
Many business owners mix these two up, but lenders treat them very differently.
An overdraft is usually attached directly to your everyday business bank account. It often moves up and down automatically as money comes in and out, and is commonly reviewed or reduced if trading weakens.
A business line of credit is usually a separate facility. It sits outside your main account and can be drawn on when needed. Because it is standalone, lenders often assess it more like a loan, with a stronger focus on bank conduct, stability, and existing commitments.
Both can support cash flow. The difference is how flexible they are, how they are reviewed, and how tightly lenders control access when conditions change.
Unsecured business line of credit
An unsecured business line of credit means there is no specific asset, such as property or equipment, used as security.
That does not mean the facility is easy to obtain.
Because there is no asset backing the facility, lenders rely heavily on the strength of the business itself. This usually includes consistent trading income, clean bank statement conduct, manageable existing repayments, and evidence the business can handle repayments even if revenue dips for a short period.
Unsecured facilities can work well for established businesses that want flexibility without tying up assets, but they are typically assessed more conservatively than secured options.
Costs, fees, and interest rates (simple guide)
A line of credit can be priced in different ways. Depending on the provider, you might see:
An establishment fee
A line fee (a fee for keeping the limit available)
Other account or service fees
Interest charges based on the provider’s pricing model
Some facilities can look cheaper upfront but cost more once fees are added. Others can look higher, but still be worth it if they prevent repeated short-term lending.
A realistic note about pricing
Pricing varies based on the strength of the application and the provider’s structure. There isn’t a single “standard” price across the market.
Fee reality check (this surprises most owners)
Some line of credit providers keep fees simple. Depending on the facility, you may find options with:
No establishment fee
No drawdown fee
No monthly line fee
No annual fee
No early payout fee
Not every facility is structured this way. Fee settings vary by provider and by risk profile. If you want, an eligibility check can help you see which structures are realistic for your business before any application.
Why line of credit approvals are harder
This is the part most pages online skip.
A line of credit is flexible.
That flexibility is exactly why lenders can be picky.
A lender is asking:
“What happens if sales drop next month and they still have access to draw funds?”
So they focus heavily on:
Bank statement conduct
Repayment history
Existing debts and stacked repayments
Business stability
Recent credit enquiries
That is why many business owners feel surprised by declines.
It is not always a “bad business” issue.
It is often a “not the right fit right now” issue.
In practice, many declines happen because the facility doesn’t match the lender’s risk appetite at that time, not because the business is failing.
The reasons many applications do not get through
Here are the most common problems that show up.
1) The bank statements look messy
Examples include:
Too many negative days
Dishonours
Large swings in revenue
Regular gambling-style transactions (even small ones)
Unclear transfers that look like other debts
2) Repayments are already stacked
If the business already has multiple short-term repayments coming out, a line of credit can be much harder.
3) Tax pressure is visible
If there is clear tax stress in cash flow, lenders may become cautious.
4) Too many enquiries
This one surprises people.
Some lenders are very sensitive to recent enquiries.
That is why “applying everywhere” can backfire.
This is not fear.
It is just how many credit teams assess risk.
Important note: some lenders can become cautious after certain recent enquiries. Some credit teams have policies that automatically decline applications if they see enquiries with particular providers or product types. If the goal is a more competitive facility from the beginning, it can be safer to do an eligibility-check first so you avoid enquiry stacking and keep more options open.
A quick tip most business owners never hear
Many business owners think this is the smart plan:
“I will just apply and see what happens.”
But with some lenders, a failed application can make the next one harder.
That is why many owners choose a fit-check first.
A fit-check is not magic.
It just avoids avoidable mistakes.
It helps you apply once, with the right lender, at the right time.
How fast can a business line of credit be approved
Approval speed depends less on the lender and more on the quality of the application.
Lenders generally move fastest when bank statements are clean, trading is consistent, and the purpose of the facility is clearly explained. In those cases, initial assessments can happen quickly.
When bank conduct is uneven, repayments are stacked, or documents raise questions, the process slows down. This is because lenders ask for clarification to understand how the facility will be used and repaid.
Speed is possible, but it is usually the result of preparation rather than urgency.
Who this page is for
This page is for:
Business owners considering a line of credit facility
Owners who want flexibility, not just a one-time loan
Anyone who wants to understand approval rules before applying
Anyone who has been declined for an overdraft at their bank
Someone interested in getting insights from a specialised finance broker
Who this is not for
This page is not for:
Businesses trading less than 2 years
Businesses with unpaid defaults
Anyone looking for “instant approval” shortcuts
Those searches exist, mostly pushed by marketing. The reality is many “instant” options come with short terms and heavy repayments that can squeeze cash flow.
What we usually see when this happens is often a cycle of continued borrowing.
Can a new business get a line of credit
In the non-bank lender space, usually no.
The lenders want a clear trading history first.
If the business is new:
Your best bet is usually to apply directly with your bank.
You will generally require some form of security (property)
Business plan
Cashflow forecasts
This is why “new business line of credit” is commonly searched online, but there is no firm, consistent answer.
Bad credit and line of credit facilities
Bad credit does not always mean “no”.
But it can change the options.
If you’re searching for a business line of credit and your credit history is not clean, you’re not alone. Many business owners are in the same position.
What matters most is often:
Current trading strength
Current bank conduct
Whether repayments are already too heavy
If you want the plain-English guide for bad credit scenarios, see:
If you want to see if you qualify without any impact on your credit score:
The real goal: protect the business from repeated short-term debt
This is the bigger picture.
A line of credit can stop the cycle of:
short-term funding
high repayments
cash flow stress
needing more short-term funding again
That cycle is common.
And it is exhausting.
A line of credit is often used as the “buffer”, so the business is not forced into panic decisions.
If you’re already carrying multiple short-term facilities, consolidation can sometimes be the cleaner path. See: Business debt consolidation loan.
Why some premium line of credit providers prefer broker-led applications
Here is what has happened in parts of the market.
Some very competitive providers have stepped back from direct applications.
Not because the product is bad.
But because most direct applications were not a fit.
When the fit is wrong, approval rates are low, and the process creates frustration for everyone.
So some lenders have moved toward broker and partner channels, where applications are:
fit-checked first
packaged clearly
explained properly
This tends to create better outcomes and fewer wasted enquiries.
How CASEY can help
CASEY helps business owners get clarity before they apply.
That usually means:
An eligibility-check first
A simple view of what lenders are likely to care about
A plan to avoid avoidable declines
We have strong relationships across the market and can help you avoid wasted applications and unnecessary enquiries.
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Related resources
If you are researching specific options or comparing structures, you may also find these helpful:
Lumi line of credit review (2026)
A plain-English look at how Lumi’s business line of credit works, who it tends to suit, and where it may not be a fit.Business debt consolidation loans
An overview of how longer-term consolidation can be used to replace multiple short-term facilities and reduce repayment pressure.Unsecured business loans
A guide to unsecured lending options, how they are assessed, and when they may be more appropriate than flexible facilities.
FAQs
How can CASEY help me?
CASEY helps you work out whether a line of credit is likely to fit before you apply.
That usually includes:
A quick eligibility check (so you avoid enquiry stacking)
A plain-English view of what lenders will focus on
A clear next step, only if you want to proceed
If you’d like, you can start here: Check Eligibility (30 sec).
What is a business line of credit?
It is a credit limit your business can draw from when needed, repay, then draw again.
Is a business line of credit a good idea?
It can be, when the business needs a buffer for timing gaps. It is not always a good fit if the business already has heavy repayments.
What is a line fee?
A line fee is a fee some providers charge to keep the credit limit available, even if you don’t use it. Not every provider charges one, and fee structures vary.
Why do businesses get declined?
Common reasons include messy bank statement conduct, stacked repayments, tax pressure, revenue drops, and too many recent enquiries. Having spoken with our BDMs deeply around this topic, it’s often due to how the application has been prepared for that lender.
Can I get an unsecured business line of credit?
Sometimes, yes. Unsecured can still be strict, and it usually relies heavily on trading strength and bank conduct. Unsecured line of credit facilities up to $150,000 limits is not unusual.
Is “instant approval” realistic?
Some lenders can move fast when the file is clean. But “instant approval” is often marketing language, and the reality usually depends on documents and bank statement conduct.
Prefer to talk it through? Call or text Michael on 0450 622 115.
Important note (general information only)
This page is general information and doesn’t take into account your objectives, financial situation, or needs. Outcomes depend on lender assessment and eligibility criteria. Consent matters — we aim to avoid wasted applications and only proceed when you want to.
About CASEY
CASEY is an Australian business finance brokerage helping business owners understand what options may be available.
Business name: Casey Finance Australia Pty Ltd (trading as Casey Asset Finance)
ABN: 21 675 061 113