favi

Low doc approval up to $250,000

Flexibility and control

Interest free cash flow buffer

You can pay any time

Term up to 5 years

What is a business line of credit?

A business line of credit is a revolving credit facility where a lender approves a maximum credit limit for your business to draw from as needed. Unlike a term loan, you only pay interest on the amount you actually use — not the full approved limit — and repaid funds become available to draw again.  With a line of credit, a lender provides an ongoing commitment to a business by setting up a credit limit to use it based on their requirements. The lender only charges interest on the funds utilised by the business.

Business owners can greatly benefit from having a line of credit by allowing more flexibility to a business in terms of managing cash flows. It is considered an essential product for any business especially in emergency situations. Business line of credit is also referred to as “Revolving Line of Credit ” or simply “Line of Credit” or a “Business Overdraft”.

Business line of credits are good for businesses which have short term cash flow fluctuations and can be very economical if utilised efficiently.

Check if you are eligible?

  • Have an active ABN
  • Operating for more than 12 months
  • Monthly turnover > $10k

Our loan guide

Business Line of Credit — Flexible Funding Up to $750K

Loan amount

10k- $750k

Interest rates from

7.99% p.a.

Loan term

Up to 5 years

Pre-approval time

24 hours – 48 hours

Unconditional approval & settlement time

1-3 days

Repayments

Weekly /Monthly amortised over a period of time

Security

May be required after a certain amount

What you need to know

Can be used for

Buying stock /Inventory

Paying wages /rent

Marketing & advertising

Manage cash flow fluctuations

Other working capital needs

Documents required (low doc approval)

Up to $250,000 basis

Last 6 months bank statements

ATO statements

A valid identification proof

Documents required (full doc approval)

More than $250,000 basis additional docs

Financial statements

Others as required

*The information provided in

critical information sheet

is intended as a guide only. Please contact us for more information.

Business Line of Credit, Invoice Financing and Debtor Finance compared

Although other financing options such as Invoice Financing and Debtor Financing may work closely as a Business Line of Credit on a fundamental level, there are differences you should know before choosing one. The key features and differences can be seen as below.

Line of Credit

Don’t require to present any invoice or ledger to draw funds.

This facility gives flexibility to business owners to redraw or repay as and when the funds are required.

Interest free cash flow buffer to businesses.

Flexibility and control to the borrower

Pay interest only on utilisation

Learn More

Invoice Financing

Need to present invoice to draw funds every time.

An invoice finance facility allows businesses to get paid in advance against their invoices.

Instantly get up to 95% of the unpaid approved invoices

Highly effective for businesses with higher invoice realisation period.

One can get higher limits without any security

Learn More

Debtors Financing

Debtor Financing facility allows to get paid in advance against the receivable ledger.

The limit gets adjusted periodically basis receivable ledger.

Get funded up to 80-85% of the receivable ledger.

Pay interest only on utilisation

You save interest if the debtor pays off early.

Learn More

What you should know about Business Line of Credit

Have questions? Speak to our experts!

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How does a Line of Credit work?

A business line of credit works in five steps: (1) a lender approves a credit limit based on your cash flow and trading history; (2) you draw funds up to that limit at any time, for any business purpose; (3) interest accrues only on the amount drawn, calculated daily; (4) as you repay drawn funds, the available limit resets and can be redrawn; (5) at the end of the facility term (typically 1–5 years), some lenders offer a rollover option.

You don’t have to always use the entire limits. Rather, you can assess how much money you want to spend using the line of credit as per your business needs and only pay interest on the amount you draw, not on the whole credit line. Some lenders offer the option to amortize the repayments of the limit utilised up to 4 years to suit your business cash flows. You have the option to repay the entire outstanding balance at once as well.

Line of credit illustrated by an example

Assume you are a small business and need funds on an ongoing basis to pay wages, rent, bills, cover unpaid invoices, buying stocks, paying suppliers etc. Based on your business and cash flow assessment a lender approves a business line of credit of $100,000.

Now you have flexibility to use the available funds up to $100,000 any point and any number of times.

Say in month 1, you just drew $25000, and paid back the same within 20 days of withdrawal. Here, you’ll be charged interest on $25,000 for 20 days only irrespective of having a limit of $100,000.

Now say in month 2, you used the entire $100,000 and paid back $50,000 within 15 days. Again after 5 days you used another $25,000 and paid back the entire $75,000 in 10 days. Here, you’ll be charged interest on $100,000 for 15 days, then on $50,000 for 5 days and on $75,000 for 10 days.

Also, though you had a business line of credit limit of just $100,000 but overall utilisation for the month was $125,000. Hence, you can maximise your utilisation by efficiently churning the funds.

You also have an option from few lenders to get every drawing amortised over a period of time and pay weekly/monthly instalments.

What are the advantages and disadvantages of taking a Business Line of Credit

Advantages

Gives flexibility to use the funds whenever needed.

Can be Secured or Unsecured, so you don’t necessarily need a security.

No early repayment penalty. You can simply pay off when funds are not required.

Allows you to save lots of interest as you only pay on what you use.

Peace of mind with facility term available up to 5 years.

Disadvantages

Generally, to get a business line of credit you need to have a good credit score and decent turnover.

The lenders may charge a small line fee on overall limit, on top of normal interests for making the funds available to use for your business.

A lender may withdraw/reduce the business line of credit on review if there are irregularities in repayment, dip in business turnover or the funds are misused for other purposes than the business.

Types of line of credit

Generally, there are 2 types of a line of credit.

Revolving line of credit

A revolving line of credit means the line of credit is an open-ended credit account. This allows borrowers to draw the money and repay it as many times during the tenure of the facility. In most cases, a line of credit is offered as a revolving line of credit.

Non-Revolving line of credit (Fixed)

A Non-Revolving line of credit functions the same as a revolving line of credit. However, an exception is that, there is no option to redraw even after repayments are made. Once borrowers fully utilise the line of credit, the account will be closed.

What documents are required to apply for a Business Line of Credit?

Low Doc

Generally, you can get limits up to $250k, basis low documentation. You only need to provide the following documents in most of the cases.

  • Last 6 months bank statements
  • A valid identification proof of the business owner

Full Doc

For a business line of credit more than $250k, you may require submitting the following additional documents

  • Financial statements
  • ATO Statement
  • Property ownership proof

How much business line of credit can I borrow?

The borrowing credit limit for a line of credit depends on various factors

Generally, lenders will consider the maximum line of credit amount by evaluating a business’s cash flow and how quick it can repay the borrowing amounts it utilises. A higher average monthly revenue can provide you access to greater maximum amount of line of credit

To lenders, “time in business” could be evaluated as a factor of the momentum in the business. Usually, lenders assume businesses that have been operating for more than a year are more likely to take on more debt obligations and have much more balanced cash flow activities.

Though you can get a business line of credit up to a certain limit without any security, the lenders place higher weightage if a business or its directors are asset backed. It helps them in getting a higher loan amount with better term

The maximum amount of line of credit that is approved may differ based on the industry that a business operates in. This is because every industry has different methods of collecting payments from their customers. If your business is mainly selling products directly to end-users (B2C), you may collect payments in cash or credit card, which provides you with an immediate source of revenue, which is usually favoured by lenders. On the other hand, if your business mainly makes commercial transactions with other businesses (B2B) where invoices are often used, the delay payments may be seen as a risk by lenders, which could impact the maximum amount of line of credit you can borrow.

For an unsecured line of credit, borrowers’ credit score becomes a significant factor for consideration of the loan amount. A higher credit score means more confidence for the lender to approve a higher maximum amount of line of credit, and vice-versa.

Business Line of Credit versus Business Term Loan

A business line of credit and a business term loan both provide access to funding, but they work differently. Here's how to decide which is right for your business.

Start loan application

Business Term Loan

One off drawdown is allowed at the start of the facility.

The loan is amortised into daily /weekly /fortnightly /monthly repayments over the period of the loan term.

Early repayment penalty may apply.

Fixed loan term

Borrower cannot redraw, need to reapply for additional funding.

Business Line of Credit

Redraw facility available

Repayments can be very flexible. You have the option to amortize or pay back the entire amount anytime.

No early repayment penalty.

Open-ended loan term

Interest is charged only on utilisation, so you can save interest when funds not needed.

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Frequently asked questions

A business line of credit is similar to having a credit card limit. You would be approved a line of credit limit at the start of the loan. Once your line of credit is approved, you can draw funds at any time via bank transfer or linked account, up to your approved limit. You repay at your own pace. Weekly, fortnightly, or monthly, and interest is charged only on what you've drawn, calculated daily.

A business line of credit could not necessarily be a right fit for any business. It all depends on the nature and term of funds requirement into your business. If your business has seasonal fluctuations in cash flow and you do not require the funds on an ongoing basis, a business line of credit would be the right product for your business as you would have to pay interest only when you utilize the funds. However, if a business has an ongoing requirement and you are likely to utilize the funds throughout the year, a business term loan could be a better product as the borrowing costs may come cheaper as compared to a business line of credit loan. Please feel free to reach out to us on 1300 253 041 or send us a message in case you wish to know more.

A business line of credit typically has three potential costs: interest on drawn funds (from 7.99% p.a.), a line fee charged on the full approved limit regardless of utilisation, and in some cases a drawdown fee per transaction.

Interest cost: Interest charged on the funds utilised.

Line fees: There may be a small monthly/weekly/Annual fee charged by the lenders for facilitating you a line of credit throughout the term of the loan irrespective of your utilisation. This fee is charged on top of regular interest incurred on utilisation of funds.

Drawdown Fees: Some lenders may charge a small drawdown fee on each drawdown instead of line fees. This fee is charged on top of regular interest incurred on utilisation of funds.

Most of the lenders calculate the interest on a daily utilization basis and charge monthly to the accounts.

Repayments depend on the lender and structure chosen. Most require weekly, fortnightly, or monthly repayments of interest plus a percentage of the principal drawn. Some lenders allow you to amortise each drawing over a set period, similar to a term loan; while others allow full repayment at any time with no early exit penalty.

Generally, the term of a business line of credit range between 1 year to 5 years. Few lenders also provide a rollover facility at the end of the term.

The main alternatives to a business line of credit are: unsecured business loans (lump sum, fixed term, typically lower rates for ongoing use), invoice finance (draws against unpaid invoices), debtor finance (draws against the full receivables ledger), and business overdrafts (similar revolving structure, often bank-administered). The right choice depends on whether your funding need is ongoing and variable, or fixed and one-off."

Please reach out to us on 1300 253 041 or send us a message. One of our lending specialists would get in touch in no time to assist you.

Lenders would run a credit check only after obtaining a consent from you

At Broc Finance, we endeavour to get the most adequate facility suitable to the business requirements of our clients. In most of the cases logged in through us, we try to get an indicative offer from the lender for our client’s consideration before proceeding with formal application and consent to credit check. This approach helps our clients to avoid unwanted rejections and credit checks which can significantly impact their credit score.

We would be happy to answer, if you have any other questions. Please contact us.

A business line of credit and a business overdraft work similarly — both are revolving facilities where you draw and repay as needed. The key differences are: overdrafts are typically linked to a business transaction account and have lower limits (usually up to $50,000–$100,000), while a line of credit is a standalone facility with higher limits (up to $750,000) and more flexible repayment structures. Broc Finance offers both — contact us to determine which suits your situation.

Yes. Unsecured business lines of credit are available up to $250,000 based on cash flow alone — requiring only 6 months of bank statements and photo ID. Above $250,000, lenders typically require property or other assets as security. A strong credit history and consistent monthly turnover above $10,000 improve your chances of approval and limit size for an unsecured facility.

To get a business line of credit: confirm you have an active ABN, at least 12 months of trading history, and monthly turnover above $10,000. Gather your last 6 months of bank statements. Apply through Broc Finance — a specialist will match you with the most suitable lender from a panel of 150+, with approval typically in 24–48 hours and no credit check until you consent.

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