Business overdraft · Cash flow finance
Business overdraft for Cash flow finance
Cash flow finance is short-term business funding that covers the gap between paying costs and receiving revenue, used for wages, suppliers and tax rather than for buying assets.
How a business overdraft works for Cash flow finance
An overdraft attaches to your trading account and simply lets it go below zero to an approved limit, which makes it the least administratively demanding option — no drawdown requests, no separate account. Bank overdrafts are usually the cheapest revolving money available, though they are also the slowest to arrange and generally want security and full financials. For an established business with a bank relationship and property, an overdraft is often better value than any fintech facility.
The cash-flow pattern we plan around
Costs falling due weekly or fortnightly against revenue arriving on 30–60 day terms, with the gap widening as the business grows.
What cash flow finance typically fund
- Wages and superannuation between invoice payments
- Supplier and trade accounts falling due
- BAS, PAYG and quarterly tax obligations
- Bridging a seasonal trough
Business overdraft for Cash flow finance: the numbers
| Typical amounts | $10,000 – $500,000 |
|---|---|
| Term | 12–12 months |
| Indicative rates | 8.5% – 19.5% p.a. |
| Repayments | No set repayment — deposits reduce the overdrawn balance |
| Speed | 3–10 business days depending on security |
| Documents cash flow finance usually need | ABN, GST registration and 6–12 months of bank statements · Aged receivables and payables reports · Most recent BAS lodgements |
Rates shown are indicative ranges observed across our lender panel for the period stated. They are not an offer or quote. Your rate depends on your business, the lender, the amount, the term and the security offered. The lender makes the final credit decision.
Key terms
Cash flow finance
Cash flow finance is short-term lending used to cover operating costs during the gap between outgoings and incoming revenue, typically repaid within twelve months and not used to purchase assets.
Structural versus one-off gap
A structural gap recurs every trading cycle because of payment terms, and suits a revolving facility; a one-off gap arises from a single event and suits a term loan with a defined end date.
What is a business overdraft?
A business overdraft is a revolving credit limit attached to a business transaction account. The account can be overdrawn up to the approved limit, interest is charged daily on the overdrawn balance, and deposits automatically reduce what you owe.
How much does a business overdraft cost?
Overdrafts typically carry an interest rate on the overdrawn balance plus an annual line fee of about 1–3% of the limit and a one-off establishment fee. Because line fees apply whether or not you draw, the effective cost depends heavily on utilisation.
Is a business overdraft secured or unsecured?
Both exist. Secured overdrafts are backed by property or a general security agreement and carry lower rates and larger limits; unsecured overdrafts rely on trading performance and a director’s guarantee, and are usually capped well below $250,000.