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Business Line of Credit

Boost your cash flow with ongoing funds

Get flexible access to revolving capital from $5,000 - $500,000

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At Lumi, we don't believe in surprises.

(at least, not when it comes to finance).

Instead, we pride ourselves on offering straight-forward cash flow solutions to give your venture the financial boost it needs.

No guesswork, no hassles, no reading between the lines. Just totally transparent loans to help you get ahead.

A few other reasons why you'll love a Lumi line of credit...

Application outcomes within 2 hours
Draw down from $2k up to $500k
Repayment periods up to 24 months
No hidden fees or charges
No collateral needed to secure the loan
Draw down available on the same business day
We're a trusted direct lender
No early repayment fees

Why Lumi?

We know that running a small business isn't an easy feat.

You see, we're a small business ourselves and understand the daily challenges facing those who dare to dream big.

Gone are the days of lengthy applications and endlessly jumping through hoops to secure the finance your SME needs. We’ll provide you with an accurate, fair, and honest line of credit that’s tailored to your small business.

High-five to that.

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Here's how it works:

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Are you ready to apply for business funding?

You’re only a few online steps away from submitting your business finance application with Lumi.

Tick the boxes to check if you’re ready to apply.

Min 6 months in business
Active ABN or ACN
Min $5,000 monthly revenue

Receive a lending decision within just 2 hours

All About Business Line of Credit

Even if your business doesn’t need a large injection of cash all at once, you might find some things are financially out of reach, from time to time. If so, a business line of credit may be a great solution for you. With a form of convenient, flexible, ‘revolving’ capital, you can borrow the money you need, when you need it.

What is a Business Line of Credit?

When you have a business line of credit, you can borrow a certain amount of capital annually, just as with personal credit. You make payments only on the credit you've actually used. This can help you manage cash flow shortages or cover surprise costs until you have the funds. You won’t have a regular monthly payment schedule as you would with a long term or short term loan but there usually are minimum monthly payments required.

A business credit line can be secured or unsecured and it can be easier to get compared to other types of business loans. It should not, however, be used for long-term investments or major purchases. Businesses should be able to repay promptly as the interest and late fees can compound quickly with a line of credit.

How much can I borrow?

Rates, terms and limits for business credit lines vary. The interest rates on lines of credit are generally lower than those of credit cards, with higher limits. They are based on the bank or financial institution’s prime rate, plus a premium. Interest is charged as soon as money is borrowed, so a business can set up a line of credit as a safeguard, with incurring interest. There may, however, be a setup fee and an annual fee to keep the credit available.

The amount you can borrow is typically based on accounts receivable and current inventory but usually less than $500,000. A secured business line of credit typically comes with a higher credit limit and lower rates.

How does a business line of credit work?

Apply - You can get a line of credit through your bank and most national and regional banks as well as many larger credit unions offer business credit lines.

Get approved - Getting a credit line depends on your business’ creditworthiness and your personal credit history and score.

Tap into your funds - Draw down or withdraw funds on your line of credit any time to help your business grow.

Business line of credit vs Business credit card

A business line of credit may sound the same as a business credit card. There are, however, a number of differences between the two:

Business line of creditBusiness credit card
Can be secured or unsecured (collateral required for secured line of credit)An unsecured loan based on your personal credit history
Tap into the line of credit by making a direct deposit to your checking account, or by using a debit card linked to the accountAs it works almost exactly like a personal credit card does, use the card to pay for business-related purchases
Minimum monthly payment (based on interest charged and average daily balance)Minimum balance to be paid each month and interest charged for late payments
No cash advance feesExpensive cash advances
You can pay off your balance and borrow again as often as you’d likeYou can avoid interest charges by paying your statement balances in full
Helps to build a credit history for your businessBased on your personal credit history
Does not include rewards or benefitsYou can receive rewards for your business spending such as airline points
May have opening, renewal or maintenance feesThere is usually a joining fee or renewal fee

6 reasons why businesses may open a line of credit

There are a number of reasons why a business might apply for a line of credit, whether to take advantage of strategic investment opportunities, meet working capital needs or even as a safeguard.

Here are a few common reasons why businesses might need a credit line:

  • You’re a seasonal business steering through the quiet months or preparing for the busy season
  • You’re a high-volume, small dollar sales business and want to better manage cash flow
  • You’re looking to innovate or invest in new technology or equipment, purchase inventory, materials or supplies
  • Your credit score is not high enough for a traditional bank loan
  • For payments to suppliers who won’t accept credit cards or who charge additional fees for credit card use
  • You have an earnings history but not enough to qualify for a traditional loan
  • You are looking for opportunities to build your business credit.

4 expert tips to know about business line of credit

  1. Remember that credit is a form of debt
    Businesses must be realistic about their ability to repay what they borrow.
  2. Ask about other charges and late fees
    These can add up quickly if you’re not careful!
  3. Consider your risk level
    Applications are assessed on case-by-case basis but your chances improve if you demonstrate experience and are operating in a lower-risk industry.
  4. Put your best foot forward
    Make sure you have the necessary documents available before applying, including bank statements, profit/loss statements, your credit score and tax returns.

Still not sure if a business line of credit is right for you? Compare to a small business loan to learn more.