13% to 22% p.a. is the typical unsecured business line of credit rate in Australia in 2026. You only pay interest on the amount drawn, not your full limit. All interest and fees are tax deductible.
Most business owners we speak to want one thing: the actual number. Not a range buried in fine print. This guide gives you the real rates, fees, and worked examples so you can budget before you apply.
13% p.a. is the lowest unsecured rate available through OverdraftMe's panel of 50+ lenders. 22% p.a. is the upper end for higher-risk profiles. Most approved applicants land between 16% and 19% p.a. based on the deals we have settled in the past 12 months.
| Lender type | Rate range (p.a.) | Typical approval time |
|---|---|---|
| Non-bank (unsecured) | 13% - 22% | 1-24 hours |
| Non-bank (secured) | 9% - 15% | 1-5 business days |
| Major bank (secured) | 6% - 12% | 2-6 weeks |
Bank rates look cheaper on paper, but they require property security, 2+ years of financial statements, up-to-date tax returns, and 4-6 weeks of waiting. For most SMEs that need funds within days, non-bank rates are the realistic benchmark.
$0 to $995 is the typical establishment fee on a non-bank line of credit. Interest and the line fee are the ongoing costs. Here is how they break down.
| Cost | What it is | Typical range |
|---|---|---|
| Interest rate | Charged on drawn funds only | 13% - 22% p.a. |
| Line fee | Annual fee on total approved limit, charged whether you draw or not | 1% - 2% p.a. |
| Establishment fee | One-off setup cost | $0 - $995 |
Some lenders also charge a monthly account fee of $10-$30. Most lenders on our panel do not. There are no early repayment fees on revolving facilities, so you can pay down your balance at any time without penalty.
All three cost components are tax deductible when the facility is used for business purposes. At the 25% company tax rate, a $1,000 monthly cost effectively becomes $750 after the deduction.
Facility limit: $200,000. Average drawn balance: $80,000 (40% utilisation). Interest rate: 18% p.a. Line fee: 1.5% p.a.
Weekly interest on $80K drawn: $80,000 x 18% / 52 = $277/week.
Monthly line fee on $200K limit: $200,000 x 1.5% / 12 = $250/month.
Total monthly cost: ~$1,450. After 25% tax deduction: ~$1,088 effective cost.
That $1,450/month gives your business permanent access to $200,000 in working capital. If you draw less, you pay less interest. If you repay the full balance, you only pay the $250/month line fee until you need funds again.
| Utilisation | Avg drawn | Monthly interest (18%) | Monthly line fee (1.5%) | Total monthly |
|---|---|---|---|---|
| 0% (unused) | $0 | $0 | $250 | $250 |
| 25% | $50,000 | $750 | $250 | $1,000 |
| 40% | $80,000 | $1,200 | $250 | $1,450 |
| 60% | $120,000 | $1,800 | $250 | $2,050 |
| 100% | $200,000 | $3,000 | $250 | $3,250 |
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Check my rate →5 factors determine where you land in the 13-22% range. Here they are in order of importance.
13-22% p.a. for a line of credit sits between overdraft rates and term loan rates. But the total cost depends on how you use the facility, not just the headline rate.
| Product | Rate range (unsecured) | Interest charged on | Repayment style | Best for |
|---|---|---|---|---|
| Line of credit | 13% - 22% p.a. | Drawn amount only | Flexible, repay anytime | Ongoing cash flow |
| Business overdraft | 14% - 25% p.a. | Drawn amount only | Flexible, auto from deposits | Ongoing cash flow |
| Term loan | 12% - 22% p.a. | Full loan amount from day 1 | Fixed weekly/monthly | One-off purchases |
A term loan at 14% on $200K costs $538/week in interest from day one. A line of credit at 18% with $80K average drawn costs $277/week. The line of credit rate is higher, but the total cost is lower because you only pay interest on what you actually use.
For a full product comparison, read our line of credit vs overdraft guide or our overdraft factsheet.
4 things you can do right now to push your rate toward the lower end of the range.
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Get my rate →General information only. Not financial advice. Credit subject to lender assessment. All rates, fees and terms quoted are indicative only and subject to change based on your individual circumstances, credit profile and lender policy at the time of application. OverdraftMe is a credit representative of Lend & Loan Pty Ltd (ACL 511092).
In 2026, unsecured business line of credit rates from non-bank lenders typically range from 13% to 22% p.a. The average rate through OverdraftMe is around 17-18% p.a. Secured facilities from banks start from 6% p.a. but require property and full financials.
Yes. All interest, line fees, and establishment fees on a business line of credit used for business purposes are generally tax deductible under Section 8-1 of the Income Tax Assessment Act 1997.
On a $200K facility at 18% p.a. with $80K drawn, you would pay approximately $1,200/month in interest plus $250/month line fee, totalling around $1,450/month. You only pay interest on the drawn amount, not the full $200K limit.
Yes. Your rate depends on credit score, monthly revenue, time in business, and industry risk. Businesses with Equifax scores above 650, revenue above $30K/month, and 2+ years trading typically qualify for rates at the lower end of the range. A broker can also negotiate on your behalf.
It depends on usage. A line of credit charges interest only on drawn funds, so if you draw 40% of your limit on average, you pay interest on 40%. A term loan charges interest on the full amount from day one. For variable, short-term cash flow needs, a line of credit is usually cheaper overall.