Line of Credit

What is a Line of Credit?

If your business finds that some things are financially out of reach from time to time, a Line of Credit could be an excellent solution for you. This form of revolving capital is a fast, convenient, flexible way to access the working capital you need when you need it. You can access these funds once it’s in place without applying again. Often you will only pay interest on the drawn-down amount, not the whole facility.

What Businesses Use a Line of Credit?

  • Building & Construction
  • Manufacturing
  • Catering & Hospitality
  • Cleaning companies
  • Courier services
  • Engineering shops
  • HVAC technicians
  • Automotive
  • Removalists
  • Mining
  • Medical 
  • IT Companies
  • Professional services
  • Tradies

The Benefits of Line of Credit Loans

Unlike a loan that must be used for a specific purpose, a Line of Credit allows you to access funds whenever and for whatever your business needs. If you don’t need the money right away, don’t use it. Just repay the credit line at any point. With a Line of Credit, you have the assurance of being prepared for any situation. 

Additional benefits of utilising a Line of Credit include: 

  • Quick access to working capital
  • No collateral required
  • Pay back only what you’ve used, not the total amount approved
  • Cover those in-between payments and expenses anywhere, anytime
  • Accomplish your short-term goals
  • Access to emergency funds
  • Expand your business by using extra funds to tender for larger jobs
  • Negotiate discounts with suppliers using the overdraft for larger upfront payments
  • Access funds to pay bills while you’re waiting to receive payments. 

How does a Line of Credit work?

A Line of Credit is a flexible financing option that provides your business with access to additional funds whenever needed. The credit operates on a revolving basis, which means that you can borrow up to an approved limit even after making repayments. 

Similar to personal credit, a line of credit allows you to borrow a specific amount of capital annually. This can be beneficial in helping you manage cash flow shortages or cover unexpected expenses until you have sufficient funds. In most cases, you are only required to make payments on the amount of credit you’ve used. 

Unlike traditional loans that have regular payment schedules with fixed amounts a Line of Credit typically involves minimum monthly payments. However, it is important to note that a Line of Credit is not suitable for long-term investments or major purchases. Its primary purpose is to provide quick access to working capital when needed. It is crucial for businesses to repay the borrowed amount promptly, as the interest and late fees can accumulate rapidly. 

When you submit an application, lenders will evaluate your business to decide whether they will extend a Line of Credit based on your creditworthiness. Factors they will consider include the following: 

  • Your personal and business credit history and ability to manage finances
  • Capacity to generate revenue and how much income is expected
  • You’re a sole trader, a partnership with up to two partners, a company with up to five directors or a trustee of an eligible trust
  • Your business is registered for GST and operated under your current ABN/ACN for over 12 months.
  • You’re at least 18 and a permanent Australian resident.

Step-by-step Process: How To Apply for a Line of Credit

Taking the time to consider a few things before we get together will streamline the process. Don’t worry if you can’t answer some of these before we talk. We’ll work out the detail before we begin an application.

1. How much credit do you need

Available limits depend on the lender but typically limits range from $2,000 to $250,000. Because you don’t pay interest on the full amount and only on what you use, it’s acceptable to ask for a higher limit than you’ll likely need. Depending on your business’s revenue and credit history, you can always increase your limit if you need access to more working capital.

2. Gather essential paperwork

Having the correct documentation ready will streamline the application process. Typically you will need to provide: financial statements (preferably prepared by an accountant), proof of income, bank statements, and identification.

3. Secure a competitive lender

Discuss your needs with us, and we’ll source the most competitive Line of Credit available from our network of 30+ lenders. We’ll negotiate the best deal for your situation and manage the process from application to approval, keeping you informed as we go.

4. Gain approval and funds

Once your Line of Credit is approved, funds are usually available within 24 hours.

How to Apply for a Line of Credit

Please discuss your requirements with us

Contact principal broker Brin Hayden to discuss your needs, and we’ll begin the process. We’ll source a suitable finance provider and ensure all your necessary information is in order to secure the finance you need.

Organise documents and make application

Providers will require correct documentation to give them an accurate and up-to-date view of your financial position. Typically, we will need to provide the following:

  • Privacy & Consent Statement
  • Bank statements
  • Identification

Gain approval and secure a Line of Credit

We can source a provider, help you organise your documentation, and assemble your application in as little as five business days. Line of Credit is usually available within 24 hours of application approval.


Why Choose Cabbage Capital As Your Finance Broker?

Our founder and principal broker, Brin Hayden, brings over 20 years of experience in the commercial sector, focusing on financial solutions for small to medium enterprises to provide a real impact.

“I bring a personal approach and work with you to find the best Line of Credit lender for your situation. Unlike banks or individual providers, we’re not limited to just one or two products. We source finance from a network of 30+ competitive lenders vying for your business. Then we negotiate the best rates and terms to fit you.

If your business could do with a fast and flexible way to access working capital when needed, we can find the most cost-effective solution possible. We’ll find the right lender, take care of the detail, and have you set up in no time.”

Brin Hayden

Founder and principal broker

“I bring a personal approach and work with you to find the best Line of Credit lender for your situation.”
Let’s get started

If you’d like to book a meeting to discuss your needs or start a finance application, leave your details, and we’ll get back to you within 24 hours.
Alternatively, call Brin at 0418 574 655. 

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