Compare Business Overdrafts
Compare business overdraft products across a range of different profiles to find the right product for you.
What is a business overdraft?
A business overdraft is a line of credit that allows you to spend up to a maximum credit limit when you spend more than the balance in your business transaction account.
As with any loan, any amount you spend using the overdraft is a debt you must repay, and interest is charged daily on the overdraft balance until it is fully repaid.
Most business transaction accounts have an overdraft facility available.
An overdraft facility essentially means that a business can continue to make withdrawals when the account is empty, up to its overdraft limit, giving a large degree of flexibility in its cash flow. This can be extremely useful for paying employees or bills on time, even if your clients have not paid you yet.
There are a few types of business overdrafts, which differ in terms of the security used to guarantee the line of credit:
- Residentially secured business overdrafts
- Commercially secured business overdrafts
- Unsecured business overdrafts
Learn more about how business overdrafts work here.
How to compare business overdrafts
It’s important to look for a business overdraft facility with low fee and a low interest rate, and any useful features such as the credit limit your business may need. Thankfully, Canstar can help you compare your options easily.
How does Canstar compare business overdrafts?
Canstar uses a unique, sophisticated star ratings methodology to rate business overdrafts and business loans, which you can see for yourself in our star ratings report.
Our ratings range from 1 star to 5 stars based on how well a product provides value to consumers, and we rate different types of business loans and business overdrafts:
- Commercially secured business overdraft
- Residentially secured business overdraft
- Commercially secured business loan
- Residentially secured business loan
Each business overdraft is rated based on two things: price and features. We use a similar methodology for all of the other categories we rate, and we encourage you to read more of them at canstar.com.au
Business overdrafts vs business loans
Since we recognise that business owners have different needs when it comes to credit for their business, CANSTAR rates both business overdrafts and business loans separately.
While a business overdraft is an extendable line of credit a business can withdraw from, a business loan is a loan for business purposes, which can be used for anything from upgrading equipment to paying staff.
As with all loans, a business loan is a debt that must be repaid within a set timeframe, and interest will be charged until the debt is fully repaid.
Learn about the pros and cons of business overdrafts versus business credit cards and business loans. And if you’re a new startup, consider our list of accelerator and incubator programs available in Australia.
Important information
For those that love the detail
This advice is general and has not taken into account your objectives, financial situation or needs. Consider whether this advice is right for you.