Business lines of credit
$20,000 to $1,000,000. Draw it when stock or wages land, repay when cash comes in, and only pay for what you use.
General information only
A business line of credit is a revolving facility. The lender approves you to a limit, you draw what you need, and you only pay interest on what you’ve drawn. Repay it and the limit opens back up without a new application. A fixed-repayment term loan can’t do that.
That flexibility is also where it gets complicated. Lines of credit don’t all work the same way underneath, and the differences sit in the contract, not on the product page.
What can you use a line of credit for?
It depends on the lender, and it’s the most misunderstood part of the product. Most owners assume a line of credit is money they can use for anything. Some are. Others come with conditions, and there are four to look for.
- 01Purpose restrictions. Some only release funds against a supplier payment with an invoice attached, not for general working capital.
- 02Early payout terms. Some won’t let you pay out the principal alone, and closing the facility early can cost extra.
- 03Per-drawdown loans. Some treat every drawdown as its own loan. Draw three times and you can have three repayments running each month, not one.
- 04Exclusivity clauses. Some lenders prohibit any other working capital finance while their facility is live. This one has real teeth, and there’s more on it below.
None of that is universal. Plenty of lines of credit on our panel behave like a traditional overdraft: draw, repay, draw again, one simple facility, none of the four catches. Lines of credit aren’t risky. They just aren’t one standard product, and that matters more than the headline rate.
Is a line of credit the same as a working capital loan?
Not quite, and the difference matters when you’re comparing quotes. A working capital loan describes a purpose (funding the day-to-day cost of running the business rather than buying an asset), not a single product. A line of credit is one of the facilities that does that job. So is a business overdraft, so is invoice finance, and so is a straightforward unsecured business loan.
What separates them is the shape of the money, and it comes down to two questions:
- 01Does it revolve? A line of credit and an overdraft do. Repay and the limit is available again. An unsecured term loan doesn’t: it lands once as a lump sum and amortises away. If the need recurs, a one-off loan means reapplying each time.
- 02Do you pay on the limit or the balance? On a revolving facility you pay interest only on what you have drawn, so an unused limit costs you the line fee and nothing more. On a term loan you pay interest on the full amount from day one, whether the cash is working yet or not.
So the answer to which working capital loan is cheapest is usually a question back: how often do you need it, and for how long each time? A facility drawn and repaid every month and one that funds a single six-month gap aren’t the same problem, and the cheapest headline rate rarely wins both.
Is a line of credit secured or unsecured?
Same rule as our other facilities. Under $250,000, security is usually a director’s guarantee, and the better-priced lenders on our panel will often want a general security agreement over business assets alongside it. Some will extend a line close to the $250,000 mark with no property backing at all. You pay for that in the rate. See our unsecured business loans page for the full picture on what “no security” really covers.
Above $250,000, property security or a caveat over property becomes more common, and more so past $1,000,000. A caveat sits behind your existing mortgage rather than replacing it. It’s a smaller ask than most owners expect.
Illustrative only, not a quote. Your position depends on the lender, the amount and how the rest of the business stacks up.
How much can you access, and how does it compare to a term loan?
Business lines of credit on our panel run from $20,000 to $1,000,000. The difference from a term loan is structural. A term loan gives you a lump sum with fixed repayments from day one. A line of credit gives you standing access you draw against as needed. It suits a business with variable cash flow better than a one-off purchase.
| Facility limit | $20,000-$1,000,000 |
| Security | Director’s guarantee under $250,000 (some lenders also want a GSA); property security or a caveat becomes more common above $250,000, more so past $1,000,000 |
| Repayments | Interest on the amount drawn, not the full limit, structure varies by lender (see above) |
| Reuse | Repay and redraw without a new application, on most (not all) products |
On products that treat each draw as its own loan, three drawdowns means three repayments a month. It’s in the contract, not the brochure.
Sourced data: Equifax
Are banks still lending to small businesses right now?
Equifax’s Business Market Pulse for June 2026 found small and medium business loan demand falling year-on-year, while large business demand rose 11.8% over the same period. Asset finance told the same story: down 13.7% for SMEs, up 17.1% for large business.
That gap doesn’t mean SMEs have stopped needing working capital. It means fewer are getting a straight yes from the first place they tried. A line of credit knocked back at one bank isn’t necessarily a reflection on the business. It can just as easily be that lender tightening its SME book for reasons that have nothing to do with you. Which lenders are still writing SME facilities this quarter changes week to week. That’s a big part of why we do this for a living rather than pointing you at one bank’s website.
Source: Equifax Business Market Pulse, June 2026, via Australian Broker.
There’s a second measure that points the other way, and the gap between them is the useful part. ABS Lending Indicators records what lenders settled rather than what businesses asked for, and on that measure new small business commitments for working capital rose 29.5% in 2025-26, to $2,836 million. That’s the fastest growth of any borrowing purpose.
| Small business, new fixed-term commitments | 2024–25 | 2025–26 | Change |
|---|---|---|---|
| Working capital | $2,190m | $2,836m | +29.5% |
| Purchase of property | $21,751m | $24,743m | +13.8% |
| Construction | $2,990m | $3,294m | +10.2% |
| Plant and equipment finance | $20,650m | $20,755m | +0.5% |
| General business purposes | $5,276m | $5,250m | −0.5% |
| Total excluding refinancing | $54,527m | $58,660m | +7.6% |
Source: ABS Lending Indicators, table 30, original series, financial years to June. Collected by APRA from lenders covering 95% of business credit outstanding. ABS treats a business as small where the lender’s exposure is under $1 million and turnover is under $50 million.
These two numbers aren’t in conflict. They count different things. Equifax measures demand, meaning credit enquiries and applications. The ABS measures settlements, meaning facilities written. Fewer small businesses applied, and the ones who did borrowed more.
That’s roughly what you’d expect when the first answer is often no. Businesses stop shopping for credit casually, and the applications that do get made are better prepared and larger. It’s also why one knock-back tells you very little about whether the money is out there.
Equifax’s June 2026 data on small business loan demand. Large business demand rose 11.8% over the same period.
Why work with a broker instead of comparing lenders yourself?
Because the differences that matter on a line of credit (purpose restrictions, drawdown structure, exclusivity clauses) rarely show up on the comparison page you’d find searching on your own. A broker reads the contract terms before you sign, not after a clause catches you out. (More on how a business loan broker works.)
There’s also a newer wrinkle. Line of credit structures now exist for equipment and asset finance, not just working capital, and they can run side by side with a working capital facility rather than competing for the same limit. Most business owners researching “line of credit” on their own never find that option, because it’s not what the term usually means on a bank’s website.
Two things people get wrong about lines of credit
“Line of credit” isn’t one product
The name covers everything from a flexible overdraft-style facility to a purpose-restricted, per-drawdown structure with exclusivity clauses attached. Same name, very different product. Read what you’re signing.
Exclusivity clauses have real teeth
Some contracts prohibit any other working capital finance while the facility is live. Breach it, even without realising, and the lender can foreclose and ask for the balance back within 30 to 90 days. So before you collect quotes for a second facility, ask your existing lender whether they’ll sign off on it. Get the approval first, then sign.
What do business line of credit interest rates look like?
Rates vary by lender, facility limit, security offered and how the drawdown structure works. A purpose-restricted facility and an overdraft-style one aren’t priced the same way. It’s one of the first things we check on a call, along with how that product structures repayments. Our line of credit calculator lets you estimate the cost of drawing at different utilisation levels.
Ecommerce Loans is a finance broker, not a lender. Rates and figures shown are indicative only and subject to individual lender assessment.
Start with the market benchmark. The Reserve Bank publishes average business lending rates monthly. For July 2026:
| RBA series, July 2026 | Average rate |
|---|---|
| Small business, all loans outstanding | 7.46% p.a. |
| Small business, variable-rate, new loans | 7.07% p.a. |
| Small business, residentially secured | 6.98% p.a. |
| Medium business, all loans outstanding | 6.21% p.a. |
A line of credit is priced variable, so the variable row is the closest comparison. But the rate is only half the cost. Most revolving facilities also carry a line fee charged on your entire approved limit, not on what you’ve drawn. On a facility you hold as a buffer and rarely use, that fee can cost more across a year than the interest does.
Because banks label the same revolving product either way, the published bank pricing is directly comparable. We’ve set out what each major bank publishes, rate and line fee side by side, on the business overdrafts page. It’s the same table you’d want here, and three of the majors don’t publish a rate at all.
Source: RBA Statistical Table F7, Business Lending Rates, July 2026 data, published 7 September 2026. Ecommerce Loans is a finance broker, not a lender. Rates and figures shown are indicative only and subject to individual lender assessment.
When is a line of credit not the right call?
If you’re funding a single, specific purchase (a piece of equipment, a one-off stock order), a term loan or asset finance is usually cleaner and cheaper than standing revolving credit. A line of credit is also the wrong fit if your cash flow is so unpredictable you can’t service repayments on what’s drawn.
If that’s you, tell us on the call. A term loan that fits beats a line of credit that doesn’t.
Compare this against
Not sure a line of credit is the right shape?
Want the facility attached to your everyday transaction account?
An overdraft does the same revolving job, built directly into the account you already bank with.
See Business overdrafts →Know the exact amount you need and want fixed repayments?
A term loan gives you a lump sum with a set repayment schedule from day one.
See Term loans →Prefer repayments that move with revenue, not a fixed limit you manage yourself?
Revenue-based funding repays as a percentage of what you take, rather than a facility you draw down.
See Revenue-based lending →Want the deeper, side-by-side breakdown? Read Term loan vs line of credit →
How do you get a business line of credit?
Tell us the basics (what the funding is for, roughly how much, and your ABN) and we take it to the panel without a formal application or a credit check at that stage. We flag any purpose restrictions or exclusivity clauses on the shortlist before you apply, not after.
Want the numbers first? Try the line of credit calculator →
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Run a transport or logistics business? See how finance bridges 30-90 day terms →
Run a trades or construction business? See how finance differs by construction type →
Run a hospitality or retail business? See how finance works in this sector →
New to working with a broker? See how a business loan broker works →
Give us the basics below and we’ll call you within the hour, or at the time you choose, then come back with the two or three offers worth your time.