A Flexible Cash Flow Solution – What Australian SMEs Need to Know in 2025
Cash flow fluctuations are a reality for most small to medium businesses. Whether you’re managing seasonal slowdowns, delayed payments, or unexpected supplier costs, having a flexible funding option can make all the difference.
That’s where a business line of credit becomes a powerful tool. Unlike a traditional business loan, a line of credit gives you ongoing access to funds — and you only pay interest on what you use.
This guide explains how it works, when to use it, and how to set it up correctly for your business.
What Is a Business Line of Credit?
A business line of credit is a revolving credit facility, similar to a credit card but designed specifically for business needs. You’re approved for a credit limit (for example, $50,000), and you can draw on that amount as required.
Once you repay what you’ve used, your available balance is restored — no need to reapply.
How Does a Business Line of Credit Work?
Here’s an example:
- You are approved for a $50,000 credit line
- In March, you draw $10,000
- In April, you repay $5,000
- In May, you draw another $7,000
You’re only charged interest on the balance used — not the full $50,000. This makes it an ideal solution for managing working capital gaps without locking yourself into long-term debt.
Key Features of Business Lines of Credit
- Credit limits typically range from $10,000 to $250,000+
- Revolving facility — borrow, repay, and reuse
- Interest is charged only on the amount drawn
- Weekly or monthly minimum repayments
- Most are unsecured — no asset security required
Benefits of Using a Line of Credit
- Flexible access – draw funds any time without reapplying
- Pay only for what you use – interest is calculated on the drawn amount only
- Reusable funding – funds replenish after repayment
- Supports cash flow – ideal for businesses with seasonal demand or invoice delays
When Should You Use a Business Line of Credit?
- Bridging short-term cash flow gaps
- Covering seasonal revenue fluctuations
- Managing supplier or payroll costs
- Purchasing inventory or stock in advance
- Paying operating expenses while waiting on customer payments
This structure suits trades, retail, hospitality, creative agencies, and service-based SMEs.
Business Line of Credit vs Unsecured Business Loan
| Feature | Line of Credit | Unsecured Loan |
| Interest on full amount? | No | Yes |
| Flexibility | High | Low (fixed amount and term) |
| Repayment type | Interest-only or minimum due | Fixed repayments |
| Reusability | Yes | No |
| Best for | Ongoing or fluctuating needs | One-off expenses or projects |
How to Qualify for a Business Line of Credit in Australia
Most lenders will assess your business based on:
- Minimum 6 months of trading (12 months preferred)
- Monthly turnover of at least $10,000
- Clear and healthy bank statement history
- Reasonable business credit file or a solid explanation of any defaults
See Working Capital [Unsecured Business Loans] for other options
Secured vs Unsecured Business Credit Lines
| Type | Features |
| Secured | Backed by property or assets, usually offers lower rates and higher limits |
| Unsecured | Fast approvals, less paperwork, limits generally up to $250,000 |
Unsecured lines are more common for SMEs, especially those needing fast access to funds without offering collateral.
Real-World Example: Florist in Sydney
A florist with strong summer sales needed a flexible finance tool for the slower winter season.
With a $40,000 line of credit, they:
- Purchased $15,000 in wholesale stock before peak
- Covered $8,000 in wages during the off-season
- Repaid and reused $10,000 within two months
The flexibility allowed them to grow revenue without committing to long-term debt.
How Brokers Help Set It Up Correctly
A poorly structured line of credit can become costly or restrictive. At Lyft Money, we help Australian businesses:
- Compare lenders across more than 40 institutions
- Structure repayment plans around your business cash flow
- Avoid hidden fees, minimum usage clauses, or reapplication traps
Contact Lyft Money today.
Final Thoughts: A Smart Tool for Managing Cash Flow
A business line of credit is one of the most effective funding tools for day-to-day operations — when used strategically.
Set it up before you need it, so it’s ready when your business hits a cash flow pinch or unexpected expense.
Need Flexible, Ongoing Access to Business Funds?
Talk to the expert team at Lyft Money about setting up a tailored business line of credit for your industry and goals.