Business overdrafts
Up to $1,000,000, terms from 12 months to 5 years. A standing buffer against your transaction account, draw it when you need it, without a bank looking over your shoulder.
A business overdraft is a standing limit attached to your transaction account, you can draw below zero up to the approved limit, repay it, and draw again, paying interest only on what you’ve actually used. It’s been the classic bank product for decades, but the space has changed more in the last five years than in the twenty before it.
Overdrafts used to belong almost exclusively to the major banks. That’s no longer true, a growing group of non-bank lenders now write overdraft facilities too, often to business profiles the banks won’t touch, and the product itself has evolved along with them.
How have business overdrafts changed in Australia?
Traditionally, an overdraft meant one of the big four banks, tied tightly to your existing transaction account, usually wanting property security and reviewing you annually. Over roughly the last five years, non-bank lenders have built their own overdraft products aimed at a wider range of business profiles, and they don’t all work like the bank version.
- 01With non-bank lenders, you don’t always have to put up property security, a meaningful shift from the traditional bank overdraft.
- 02Most non-bank providers will want live, ongoing access to your bank statements so they can refresh your position before each drawdown. Be ready for that 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 simply block future drawdowns.
- 04Terms have stretched a long way. Where an overdraft was once a strictly short-term, annually-reviewed facility, terms now run from 12 months out to 5 years depending on your profile.
One thing worth knowing before you compare products: a lot of lenders could quite reasonably call their line of credit an overdraft. Many choose the different name purely to differentiate their product in the market, not because the mechanics are meaningfully different. Read what a facility actually does, not just what it’s called.
Is a business overdraft secured or unsecured?
Same tiering as our other facilities, and it holds for overdrafts too: the cheaper the rate on offer, the more security a lender will typically want in return, a director’s guarantee at minimum, often a general security agreement over business assets as well. Under $250,000, that’s usually as far as it goes with the better-priced lenders on our panel.
Above $250,000, property security or a caveat over property becomes more common, more so past $1,000,000. What’s changed is that non-bank lenders now offer overdraft facilities where property security isn’t required at all, you pay for that flexibility in the rate, same as with a line of credit.
Illustrative only, not a quote. Your actual 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 can go higher with specific lenders for the right profile. Terms have moved well past the old short-term-only expectation, depending on your profile, an overdraft facility can now run anywhere from 12 months to 5 years.
| 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 |
Business overdrafts used to be a strictly short-term, annually-reviewed facility. Depending on your profile, terms now run out to five years, a genuine shift in what the product is used for.
Why work with a broker instead of comparing lenders yourself?
Because “overdraft” and “line of credit” aren’t always two different things, plenty of lenders build essentially the same revolving facility and give it a different name purely to stand out from the next lender’s product. Comparing headline names on your own means comparing labels, not what a facility actually does underneath. (More on how a business loan broker actually works.)
A broker also knows which lenders will genuinely go unsecured for your profile, which ones will 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 finance later. None of that reliably shows up on a product page.
Two things people get wrong about business overdrafts
The name doesn’t tell you what it is
“Overdraft” sounds like a strict bank product; “line of credit” sounds more flexible. In practice, many lenders’ overdraft and line of credit products work the same way, the naming is differentiation, not a meaningful product difference. 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 be a clean way to fund a specific purchase (buy, then pay it back down), while leaving the facility sitting ready for whatever comes next, rather than tying up a separate loan for a one-off spend.
What do business overdraft interest rates look like?
Rates depend on lender, limit, security offered and whether you’re with a major bank or a non-bank provider, and the pattern holds here too: the cheaper the rate, the more a lender will typically ask for by way of personal guarantees or a general security agreement. This is one of the first things we clarify on a call, and it’s the same trade-off covered in full on our unsecured business loans page. Our overdraft calculator lets you model repayments at different limits and utilisation before you call.
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 business overdraft not the right call?
If you need a large, fixed amount for a specific one-off purchase with a clear repayment schedule, a term loan is usually the simpler and often cheaper structure than a standing overdraft. An overdraft is also the wrong fit if you’re not prepared for a non-bank lender’s ongoing bank-statement access requirement, or if you already have another working capital facility running, most overdraft providers won’t allow that, and some will foreclose if they find it after the fact.
If either of those sounds like your situation, say so on the call. Redirecting you to the right product costs us nothing and 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 actually 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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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 Andrew will come back with the two or three offers actually worth your time, usually within a business day.