Business overdrafts
Up to $1,000,000, terms from 12 months to 5 years. A standing buffer on your transaction account. Draw it when you need it, without a bank looking over your shoulder.
General information only
A business overdraft is a limit on your transaction account. You can go below zero up to that limit, pay it back and draw again, and you only pay interest on what you’ve used. Think of it as a shock absorber for the account your business already runs through.
For decades it was a big-four bank product. In the last five years it has changed more than in the twenty before, because non-bank lenders started writing overdrafts too, often for businesses the banks won’t touch.
How have business overdrafts changed in Australia?
The old version came with conditions most owners remember. It sat on the account you already had, it usually wanted your house behind it, and once a year the bank decided whether you could keep it. The non-bank version differs in four ways.
- 01You don’t always have to put up property security. That’s the big break from the bank version.
- 02Most non-bank lenders want live access to your bank statements, so they can check your position before each drawdown. Expect the request. It’s standard, not a red flag.
- 03As with a line of credit, most won’t want you running another working capital facility alongside theirs. Do it anyway and some will foreclose the facility or block future drawdowns.
- 04Terms are longer. The facility that used to be reviewed every year can now run anywhere from 12 months to 5 years, depending on your profile.
Demand for the thing an overdraft does is growing faster than demand for anything else businesses borrow for. ABS Lending Indicators put new small business commitments for working capital at $2,836 million in 2025-26, up 29.5% on the year before. No other borrowing purpose came close: property purchase rose 13.8%, plant and equipment 0.5%, and general business purposes went slightly backwards.
Source: ABS Lending Indicators, table 30, original series, financial year to June 2026. These are fixed-term commitments, so they cover the term-loan end of working capital, not overdraft limits, which the ABS reports separately. The direction is the point, not the exact instrument. Full breakdown on our lines of credit page.
One warning before you compare anything. Plenty of lenders could call their line of credit an overdraft and nobody would argue, because underneath it’s the same revolving facility. Two names, one product. Read what a facility does, not what it’s called.
Is a business overdraft secured or unsecured?
The cheaper the rate, the more security the lender wants. That rule holds here the same as everywhere else on our panel. At minimum it’s a director’s guarantee, and often a general security agreement (GSA) over business assets on top. Under $250,000, that’s usually as far as it goes with the better-priced lenders.
Above $250,000, property security or a caveat over property becomes more common, and more so past $1,000,000. What’s new is that some non-bank lenders write overdrafts with no property security at all. You pay for that in the rate, the same trade as a line of credit. Ask which one you’re being quoted on before you compare two rates.
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 long do the terms run?
Business overdraft limits on our panel run up to $1,000,000, and higher with specific lenders for the right profile. What you’re offered depends on your trading history, your security and the lender’s appetite.
| Facility limit | Up to $1,000,000, higher available with specific lenders for the right profile |
| Term | 12 months to 5 years, depending on lender and profile |
| Security | Director’s guarantee at minimum; property security or a caveat becomes more common above $250,000, more so past $1,000,000, some non-bank facilities need no property security at all |
| Ongoing requirement | Most non-bank lenders want live bank statement access to refresh your position before each drawdown |
A term of up to five years makes an overdraft a standing part of how you fund the business, not a temporary fix. Pick the term for how long you’ll need the buffer, not the longest one on offer.
Why work with a broker instead of comparing lenders yourself?
Because the parts that decide whether a facility works for you aren’t on the product page. (More on how a business loan broker works.)
A broker knows which lenders will go unsecured for your profile, which want live bank feed access as a condition, and which have an exclusivity clause that could foreclose the facility if you take on other working capital later. You find those things in the contract, or from someone who has read a lot of them.
Ask your existing lenders before you take on another one. Most non-bank lenders don’t want a second unsecured or cash flow lender on your file, and many won’t allow one without signing off on it first. Take the new facility without that approval and your current lender can foreclose, or ask you to repay the loan in full within a set period, anywhere from 30 to 90 days. So before you collect quotes and accept one, check that the lenders you already have are fine with it sitting alongside theirs. Get their approval first, then sign.
Two things people get wrong about business overdrafts
The name doesn’t tell you what it is
“Overdraft” sounds strict and bank-like. “Line of credit” sounds flexible. In practice many lenders’ versions work the same way. Read the mechanics, not the label.
It can fund a purchase, not just cover gaps
An overdraft isn’t only for smoothing cash flow. Used well, it can fund a specific purchase. You buy, pay it back down, and the limit is there again for whatever comes next, without a separate loan tied up in a one-off spend.
What do business overdraft interest rates look like?
The banks publish theirs, so here they are, taken from each lender’s own product page. The spread is wide, and the headline number isn’t the whole cost.
| Lender | Published rate | Line or facility fee |
|---|---|---|
| Westpac | From 8.11% p.a. variable | 1.20% p.a. line fee |
| CommBank (secured) | From 8.75% p.a. variable | 1.70% p.a. line fee |
| CommBank (unsecured, to $250,000) | From 14.80% p.a. variable | 1.70% p.a. line fee |
| Great Southern Bank (unsecured, $10,000–$50,000) | 11.70% to 21.70% p.a. | Not published |
| ANZ | Not published on the product page | 1.7% on limits of $50,000 or more |
| Suncorp Bank | Not published on the product page | 0.75% p.a. of your limit, plus $150–$500 per quarter |
| NAB | Not published on the product page | Not published |
The line fee is the part that catches people. Westpac’s 8.11% looks like roughly half CommBank’s unsecured 14.80%, but both charge a line fee 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 you more across a year than the interest does. Compare the rate and the fee together, or you’re comparing half the price.
The other thing in that table: three of the majors above don’t publish a rate at all. You get a number after you apply. That’s not a criticism, because pricing is risk-based. It does mean a public comparison only tells you part of the story.
Non-bank overdrafts on our panel generally price above the secured bank rates, and can go unsecured where a bank won’t. It’s the same trade-off as on our unsecured business loans page: the cheaper the rate, the more a lender asks for in personal guarantees or a general security agreement. We don’t publish a single non-bank number here, because there isn’t an honest one. It moves with your trading history, your limit and your security, so it’s the first thing we pin down on a call. Our overdraft calculator lets you model repayments at different limits and utilisation before you call.
Rates above were taken from each lender’s own published product page and last checked on 19 September 2026. They change without notice, so check the source before relying on any of them. Ecommerce Loans is a finance broker, not a lender. Rates and figures shown are indicative only and subject to individual lender assessment.
Overdrafts are priced fully variable, so this number moves through to your account almost immediately.
Sourced data: RBA
Why does an overdraft move the moment the RBA does?
An overdraft is almost always priced fully variable. That’s the trade for having no fixed term and no set repayments. The RBA reached that level after a 0.25 percentage point rise on 29 September 2026, and a variable facility passes a change through almost immediately, usually from your next statement cycle.
A fixed-rate term loan insulates you from that for the life of the loan. An overdraft doesn’t, by design. That’s not a reason to avoid one, because an overdraft earns its keep on flexibility, not rate certainty. It is a reason to model a rate rise, not just today’s number, before you pick a limit.
Source: RBA cash rate target.
When is a business overdraft not the right call?
If you need a large, fixed amount for a one-off purchase with a clear repayment schedule, a term loan is usually simpler and often cheaper. An overdraft is also the wrong fit if you’re not comfortable with a lender having ongoing access to your bank statements, or if you already run another working capital facility. Most overdraft providers won’t allow that, and some will foreclose if they find it after the fact.
If either sounds like you, say so on the call. Pointing you at the right product costs us nothing, and it saves you a facility that doesn’t fit.
Compare this against
Not sure an overdraft is the right shape?
Want a standalone facility, not tied to one bank account?
A line of credit works the same way without needing to move your everyday banking.
See Lines of credit →Cash tied up in unpaid invoices, not just day-to-day gaps?
Invoice finance advances against your debtor book directly, rather than a general limit.
See Invoice finance →High card sales volume and want funding assessed on that?
An MCA is priced and repaid against your future card takings, not a revolving limit.
See Merchant cash advances →Want the deeper, side-by-side breakdown? Read Merchant cash advance vs overdraft →
How do you get a business overdraft?
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 bank-statement-access requirements or exclusivity clauses on the shortlist before you apply, not after.
Want the numbers first? Try the overdraft calculator →
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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.