A cash-flow buffer that's there the moment you need it.

What is a business overdraft?

Not every funding need is a lump sum. Sometimes what a business needs is headroom — a facility that quietly covers the gap between money going out and money coming in.

A business overdraft is a revolving credit limit attached to your business transaction account. When your balance runs to zero, the overdraft lets it keep going — down to an agreed limit — so a supplier bill that lands before a customer pays doesn't stall the business. You draw against it as needed, repay when cash arrives, and draw again next time. Critically, you pay interest only on the balance you're actually using, not the full limit sitting available behind you.

That makes it a fundamentally different tool from a term loan. A loan hands you a fixed sum to repay on a schedule; an overdraft is standing flexibility you dip into and clear, over and over, for as long as the facility is in place.

How a revolving facility works

The mechanics are simple by design. You're approved for a limit — say $150,000. Your account operates as normal, but when outgoings exceed the balance, the facility covers the difference up to that limit. Interest accrues daily on the drawn (negative) portion and is typically charged monthly. Clear the balance and the interest stops; the limit stays ready for next time.

• Bridging cash flow — cover the gap between paying suppliers and getting paid.
• Seasonal swings — fund the quiet months and repay through the busy ones.
• Payroll & operating costs — keep everything running through timing mismatches.
• Opportunistic buying — move on stock or a supplier deal without waiting on receivables.

Used well, that flexibility is the whole point; used as permanent debt, it's the wrong tool. Our guide to when an overdraft actually makes sense covers where the structure earns its keep — and where a term loan serves you better.

Overdraft vs line of credit

They're close cousins, and the right one depends on how your banking is set up and how you like to draw. An overdraft attaches to your transaction account — seamless, because the balance simply runs negative to the limit. A line of credit is often a separate revolving facility you draw from deliberately. Both charge interest only on what's drawn.

We'll match you to whichever structure and lender fits your setup — the difference that matters is pricing and fit, not the label. For the full comparison, including when each structure wins, read overdraft vs line of credit: what's better.

Rates & what drives your pricing

There's no single "business overdraft rate" in Australia — pricing is set per deal, and the same business can see materially different offers across lenders. What moves your rate:

• Security — property-secured facilities price sharpest; unsecured carries a premium for the added risk.
• Trading history & turnover — longer, steadier trading and stronger cash flow earn better pricing.
• Facility size & utilisation — how large the limit is and how heavily you draw on it.
• Credit profile — the business's and directors' credit standing.
• Lender fit — each lender has an appetite; the right match is often the difference between a sharp rate and a declined file.

Because those levers interact, the accurate way to see your number is to run the scenario across the lenders we can access. The eligibility check does exactly that and returns a personalised indicative range in under 90 seconds.

Any figures on this page are indicative only and do not constitute a formal finance offer or approval.

The fees, decoded

An overdraft's true cost is rarely just the interest rate. Most facilities are priced across three components, and lenders weight them differently — which is exactly where comparisons go wrong.

• Interest on the drawn balance — accrues daily on the negative portion only, typically charged monthly. If you're not drawn, you're not paying it.
• The line fee (also called a facility fee) — a small percentage per annum charged on the approved limit, drawn or not, usually billed monthly or quarterly. It's the price of keeping the headroom available, and it's the fee most often missed when comparing offers. Some lenders swap it for a flat monthly account fee.
• Establishment fee — a one-off setup charge. Secured facilities can add security costs such as valuation and documentation fees.

The practical consequence: a facility with a low headline rate and a high line fee can cost more than the reverse, especially if you draw rarely. The right comparison is the all-in annual cost at your typical drawn balance — which is what the calculator below is built to show.

Secured vs unsecured

A secured overdraft is backed by an asset — usually residential or commercial property. Security unlocks larger limits and lower rates because the lender's risk is covered. An unsecured overdraft needs no asset pledged, which keeps property free and speeds setup, but limits are smaller and rates higher. Established businesses with consistent turnover are the strongest candidates for unsecured facilities; if you need a large limit at the keenest rate and have property available, secured usually wins.

On pricing, the gap is structural, not marginal. Unsecured facilities carry a rate premium because the lender is relying purely on your cash flow, so they price to the strength and consistency of your turnover — which is why two similar businesses can see quite different unsecured offers. Secured pricing hangs off the security value and sits meaningfully lower. Where the trade-off lands for you depends on how much of the limit you actually use: light, occasional drawers often do better paying the unsecured premium and keeping property unencumbered; heavy users of a large limit usually can't beat secured economics.

How much can you get?

Limits commonly range from around $10,000 to $5 million and beyond. Lenders size the limit against your turnover and cash-flow pattern, your trading history, the security on offer, and their own appetite. A useful rule of thumb: unsecured facilities are generally sized to a share of monthly turnover, while secured limits are driven more by the value of the security. The detailed guide walks through how each lever changes the number.

Bank overdrafts vs a broker panel

Most searches for a business overdraft start at a bank's door — CBA, Westpac, ANZ, NAB, and regionals like Suncorp and BOQ all offer them, and for many businesses a bank facility is a perfectly good answer. Banks tend to be strongest when you're an established customer, the conduct on your accounts is clean, and — for larger limits — there's property security on the table. The trade-offs are equally consistent: bank credit processes can be slower, unsecured appetite is more conservative, and you only ever see one lender's pricing.

Going through a broker doesn't exclude the banks — it puts them in context. We arrange facilities with access to a panel of 60+ lenders that includes the majors alongside non-bank and specialist cash-flow lenders, so the same application is priced against the whole market rather than one balance sheet. Sometimes the sharpest offer is your own bank's; often it isn't. The point of the panel is that you find out before you sign, not after.

Eligibility & how to apply

Approval comes down to a few things a lender wants to see clearly: an active ABN with a reasonable trading history, turnover that comfortably services the limit, clean recent bank conduct, and — for secured facilities — acceptable security. A tidy, well-presented application moves faster; our brokers package it so the answer is an easy yes. Dig deeper in what lenders look for and how to apply.

The path itself is short: start with the free eligibility check — it takes about 90 seconds, runs no credit check to begin, and returns a personalised indicative range. From there a broker confirms the numbers, matches the lender, and packages the application; indicative outcomes typically land within 24–48 hours, with unsecured facilities for established businesses the fastest to settle. Our step-by-step guide to getting a business overdraft in Australia walks the full journey from documents to drawdown.