Line of Credit Loan

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What is a line of credit loan?

A business line of credit (LOC) loan is a flexible financial solution that can help you manage, improve, or expand your business. Whatever the business expense, you can rest easy knowing you have easy access to cash with a LOC loan.

Is a line of credit a personal loan?

Lines of credit differ from standard personal loans or business loans. With a personal loan, you receive the full sum of money upfront and pay it off in instalments over a set period of time.

On the other hand, a LOC loan allows you to draw money whenever you need to – up to the maximum limit. And, unlike a personal loan, you do not have to borrow the total sum at once.

Common uses for lines of credit

You can use a line of credit loan for any business expense, including to:

• Cover unexpected business costs
• Manage cash flow gaps
• Finance projects with uncertain budgets
• Capitalise on investment opportunities
• Purchase equipment, land, or property

How long does a line of credit loan last?

A revolving line of credit means that your loan will continue on indefinitely until you close the account. So you can continue to borrow and pay back the money as needed.

How a line of credit loan works

A revolving line of credit works like a mix between a personal loan and a credit card.

• You have access to an approved cash limit at your disposal that you can use when needed.
• You are only charged interest on the money you use.
• As a form of revolving credit, the money can be reused once paid back, like a credit card.

How to access money from a line of credit

You can access and withdraw your money from:

• Online banking and transfers
• ATMs
• Cheques
• Funds transferred across to your chequing account

Repayments

Payments for business lines of credit are more flexible than personal loans. As long as you cover minimum costs, like interest and other fees, you can make additional payments at any time.

Loan limit

Our specialist business loan brokers can negotiate a line of credit loan up to $500,000, depending on your financial situation and business needs.

It may be possible to increase your pre-approved credit limit with your lender eventually. This would be after you have demonstrated a good credit management history with them.

Benefits of a business line of credit

Line of credit loans come with a number of benefits, including:

• Revolving line of credit
• Secured and unsecured options available
• Borrow money as needed up to the maximum limit
• Only pay interest on the money you spend
• Flexible repayments
• Possible to increase your max credit limit over time
• Interest paid on business LOC loan is tax-deductible

Alternatives to a line of credit loan

There are a number of business finance solutions that could suit your particular situation. Read an overview of alternative options below. Or you can contact us for more information and help getting the right option for you.

Eligibility

Although eligibility requirements for a line of credit in Australia will depend on the individual lender, you will typically need to:

• Be 18 years of age or older
• Be an Australian tax resident
• Have an ABN/ACN
• Have good credit – if your credit isn’t perfect, a business loan broker can help determine if a this loan option is suitable for you

Required documents

Business credit line requirements will depend on the particular lender. But while exact application requirements differ, you can expect to provide the following when you apply for a business line of credit:

• Australian Business Number/Australian Company Number
• Personal identification
• Business verification

A business loan broker can handle all the documents and specific details that go along with a loan application for you. That way you can relax knowing all the necessary documents have been supplied and the assessment and approval process will run smoothly.

Where can I get a line of credit loan?

There are a range of banks and financial institutions in Australia that offer business lines of credit.

Oceania Finance brokers can quickly assess the most suitable lenders for you. So you can save time and get tailored finance that caters to your particular business needs.

Loans for every business

Need a business loan for another reason? Learn more about these loans below:

• Cash flow finance
• Vehicle loan
• Equipment finance
• Agriculture finance
• Low doc loan