A Flexible Finance Tool for Daily Operations
Manage Cash Flow Gaps Without the Stress of Reapplying
Every business has periods of unpredictability. Whether you’re facing delayed customer payments, unexpected supplier bills or a payroll week with slow cash flow, having a business overdraft in place can offer a simple, effective solution.
This guide outlines how business overdrafts work in Australia, their pros and cons, and how to set one up for your SME.
What Is a Business Overdraft?
A business overdraft is a credit facility attached to your main business transaction account. It allows you to withdraw more money than your available balance to cover short-term working capital needs.
You only pay interest on the amount you use, and the facility is revolving — meaning funds become available again once repaid.
Common uses for a business overdraft:
- Paying staff wages
- Managing supplier invoices
- Bridging short-term cash flow dips
- Handling unplanned expenses
Link to [Business Overdraft Account] page
Key Features of Business Overdraft Facilities
• Limits typically range from $5,000 to $100,000+
• Interest charged only on the overdrawn balance
• Automatically repaid when deposits hit your account
• May be secured or unsecured
• May include set-up or monthly fees
Benefits of a Business Overdraft
• Built-in buffer – Ideal for navigating late payments or seasonal sales drops
• Easy access – Once approved, funds are available without reapplying
• Flexible repayment – Automatically repaid with incoming funds
• Interest efficiency – Pay interest only on what you use Link to [Working Capital] page for complementary funding options
When Should You Use a Business Overdraft?
This facility is best suited for short-term liquidity management, not major asset purchases or business expansion.
It’s commonly used by:
• Retailers with seasonal income changes
• Tradespeople managing invoicing cycles
• Hospitality operators covering weekend cash gaps
• Wholesalers pre-purchasing inventory
• Startups or contractors with irregular income
Overdraft vs Business Line of Credit
Feature Business Overdraft Business Line of Credit
Linked to a bank account Yes No
Interest structure On used balance only On used balance only
Repayments Automatic with deposits Flexible or scheduled
Ideal usage Daily or ad hoc shortfalls Ongoing cash flow management
Flexibility Very High High Consider also linking to [Line of Credit] page
Secured vs Unsecured Business Overdrafts
Type Features
Secured Backed by property, assets or vehicles. Offers lower interest and higher limits
Unsecured Faster to set up, no collateral required, but higher rates and smaller limits
Real-World Example: Sydney-Based Digital Agency
A digital marketing agency in Sydney had reliable long-term clients but frequently faced 45–60 day payment terms.
Lyft Money helped set up a $25,000 unsecured business overdraft, which allowed the agency to:
• Cover payroll and contractor invoices during quiet weeks
• Avoid dipping into personal savings or credit cards
• Retain financial flexibility for new client opportunities
They used the facility only occasionally, but the peace of mind and reduced financial stress proved invaluable.
How to Apply for a Business Overdraft in Australia
Most lenders will assess:
• Business turnover (usually minimum $10,000/month)
• Trading history (12+ months preferred)
• Business bank activity and transaction patterns
• Credit profile and basic financial records
Working with a broker such as Lyft Money can speed up the process, match your needs with the right lender, and help compare secured and unsecured options.
Common Pitfalls to Avoid
• Fee traps – Some overdrafts carry set-up, monthly and excess usage fees
• Over-reliance – It’s a buffer, not a growth tool
• Unsecured limits – May not be high enough for larger cash flow challenges
• Misunderstanding repayment cycles – Auto-repayment with deposits can impact planning
Final Thoughts: Is a Business Overdraft Right for You?
A business overdraft is not designed for large-scale investment or expansion — it’s a cash flow safety net. Think of it as your short-term backup plan for day-to-day liquidity challenges.
It’s best set up before you need it, so you’re covered the next time a late payment or urgent order comes through.
Set Up a Business Overdraft with Confidence
Lyft Money helps businesses across Australia access tailored overdraft facilities with fast turnaround and no confusion. Speak with our team today to explore overdraft options