Business line of credit in Australia
A business line of credit is a pre-approved limit you can draw down, repay, and draw again, paying interest only on the balance you actually use. It suits lumpy or seasonal cash flow, where a lump-sum term loan would leave you paying interest on money sitting idle. Think of it as a flexible buffer for the gaps between money going out and coming in, rather than finance for a single planned purchase.
Line of credit vs term loan
The difference is flexibility versus certainty. A term loan gives you a fixed sum and a fixed repayment schedule, which is ideal for a known, one-off cost. A line of credit gives you access to funds on demand, which is ideal when you don't know exactly when or how much you'll need.
What to check
Revolving credit has its own fee patterns worth reading closely before you sign.
- Whether there's a fee just for having the facility open
- The interest rate on drawn balances, and how it's calculated
- Any minimum draw or minimum monthly interest
- How quickly you can access funds once approved
Panel lenders that may fit
| Lender | Advertised rate from | Loan size | Typical speed | Products | Industry code |
|---|---|---|---|---|---|
 Lumi | Quote-based | $5,000 – $1,000,000 | Same business day | Term loan, Line of credit | AFIA Code signatory |
 Prospa | Quote-based | $5,000 – $500,000 | Funds within an hour of signing | Term loan, Line of credit | AFIA Code signatory |
Terms as at July 2026, from each lender's own site. “Quote-based” means the lender prices each loan individually (Lumi quotes a total repayment; Prospa uses simple interest) rather than publishing a headline rate. Figures are indicative, not a quote; your rate depends on the lender's assessment. Verify current terms with the lender.
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Common questions
- Do I pay interest if I don't draw on it?
- Usually you pay interest only on the balance you've drawn, but some facilities charge a line fee or minimum just for keeping it open. Confirm both before signing.
- Is it the same as a business overdraft?
- Similar in spirit, a flexible buffer, but overdrafts are typically bank products attached to a transaction account, while a line of credit from a non-bank lender is a standalone facility. The mechanics and pricing differ.
- Which lenders offer a line of credit?
- On our current panel, Lumi and Prospa advertise a line of credit alongside their term loans. The table above filters to the ones that do.