A Drawdown is when a business accesses funds from an approved facility such as a Business Line of Credit, Working Capital Loan, or Invoice Finance limit. It is the moment money is transferred from the lender to the business for operational use.

In asset finance, a Drawdown refers to when a Vehicle Finance or Equipment Finance contract settles and funds are paid to the supplier.

Why Drawdowns Matter

Cashflow-heavy industries such as tradies, truckies and truckers, cafés, and medical clinics rely on fast Drawdowns to keep projects and operations moving.

• LOC Drawdowns help manage payroll, suppliers, and ATO obligations.
• Invoice Finance Drawdowns accelerate slow customer payments.
• Asset finance Drawdowns complete settlements for vehicles and equipment.

Drawdowns impact interest costs, Credit Limit availability, and overall Borrowing Capacity.

How Drawdowns Work

• The facility (LOC, WCL, or Invoice Finance) is approved.
• The business requests funds via portal, email, or automated draw rules.
• Funds are released to the business account or directly to a supplier.
• Interest or fees begin accruing only on the amount drawn.

For asset finance, the Drawdown occurs at settlement when the lender pays the dealer or supplier and the PPSR registration is finalised.

Related Switchboard Resources

• Business Line of Credit
• Invoice Finance
• Working Capital Loans
• Business Cashflow System
• Credit Limit

For official information: business.gov.au