Unsecured Business Overdraft: How Much You Get and What You Sign
Unsecured Lending
Business owners · Cashflow finance · Product guide
Unsecured means no property and no equipment on the line. It does not mean no recourse. This guide sets out what each lender tier will actually approve, what the guarantee you sign covers once the facility is running, why two identical businesses get priced differently, and what has to be released before you are genuinely out of it.
Quick Answer
An unsecured business overdraft lets your business draw past zero on its transaction account without pledging property or equipment, with a director's guarantee doing the work security would. Limits, pricing and paperwork differ sharply by lender tier, and the guarantee matters more than the word unsecured suggests.
Also called: business overdraft facility, unsecured business line of credit, working capital overdraft.
How much can a business get on an unsecured overdraft in Australia?
Australian banks currently publish unsecured business overdraft bands running from $2,000 up to $250,000 at the top end, and the non-bank tier goes further on bank statements alone, so the honest ceiling depends on which door you walk through. Every figure on this page was read from the lender's own live product page in August 2026, and the table below sets them out one tier at a time. If you want the mechanics of the product before the numbers, the hub guide's section on secured versus unsecured overdrafts is the ground this page expands on.
| Lender or tier | Unsecured limit range | Where security re-enters | Entry marker |
|---|---|---|---|
| NAB QuickBiz | Up to $50,000 | No physical assets taken at these limits | GST registered, $75,000 turnover, current ABN or ACN registered more than 12 months |
| ANZ GoBiz | $2,000 to $200,000 | GSA possible on overdrafts $200,000 to $300,000 | 6 months on the ABN |
| CommBank | $2,000 to $250,000 | Secured version available from a lower published rate | Registered Australian business, no published trading or turnover minimum |
| Westpac | Up to $250,000 | Publishes a flat unsecured rate, with the secured overdraft priced separately | 12 months trading, $75,000 turnover, GST registered |
| AMP | $2,000 to $50,000 | $20,000 cap sole traders, $50,000 single director companies | Registered more than 6 months, GST registered, sole trader or single director company |
| Prospa Business Line of Credit | $2,000 to $500,000 | No upfront asset security to the full limit; director's guarantee applies | Minimum $6,000 monthly turnover, 2 years trading |
| Dynamoney Business Overdraft | Non-property owner to $100,000; property owner to $500,000 with 24 months GST registration | Director's guarantee required; interest set as a margin above the RBA cash rate | 12 months ABN and GST registration |
| Wider non-bank cashflow tier | To roughly $100,000 to $150,000 with no property; statement-based files to roughly $500,000; published ceilings to $2m | Director's guarantee standard; a general security agreement or charge over assets at the upper end | From roughly 4 to 12 months on the ABN, with overdrafts at the stricter end of that range |
Figures read from each lender's published product pages and guides in August 2026. Lenders change published limits, rates and entry rules without notice, so treat every row as indicative until confirmed on the day, and note the remaining rows name the products these figures belong to rather than recommending any of them.
The ceilings stop where they do for a reason worth understanding, because it tells you what to do if you need more. Up to a point, two things stand in for security: the conduct on your business transaction account, and the director's guarantee. Statement conduct tells a lender how the business actually behaves between invoices, and the guarantee gives it a person to pursue if the company cannot pay. Past that point the substitution stops working. The guarantee is only worth what the guarantor can be made to pay, and statement conduct on its own cannot carry a six-figure revolving exposure, so the lender either takes a general security agreement over the company's assets or asks for property. That is why the bands cluster where they do rather than running smoothly upward.
Two thresholds in the non-bank tier are worth holding onto, both stated with deliberate imprecision because they move. Lending to a business where nobody behind it owns property tops out at roughly $100,000 to $150,000 on the published product guides read in August 2026. Files assessed on bank statements rather than full financials run to roughly $500,000, and above that the same lenders switch to full financials, which is a different assessment rather than a bigger version of the same one. Published unsecured ceilings do reach $2m on the same guides read in August 2026, but the lender publishing that figure footnotes it heavily, noting that some security will generally be required for the product. If you want to know what those 12 months of statements are actually being read for, that is covered in what 12 months of bank statements tell an overdraft lender, and the overdraft's place among the other unsecured options is mapped in the unsecured cashflow finance map.
What this page deliberately does not do is size the facility for you, because the right limit is a working capital question rather than a product question, and asking for the wrong number is the most common reason a file that should have cleared does not. How big the limit should be, and the eligibility ladder that decides whether you clear the entry markers in the table at all, both live on the business overdraft hub guide.
Can you get a business overdraft without owning property?
Yes. Australian businesses can get an overdraft or revolving line of credit without owning property, and major banks publish unsecured overdrafts up to $250,000. The trade-off is that the lender leans harder on business conduct, credit history and the director's guarantee, and some non-bank products change their documentation or security package as the requested exposure rises.
No property is therefore an eligibility question, not a promise that every part of the facility is unsecured. A bank may approve a lower unsecured limit, a non-bank may offer a separate line of credit rather than a transaction-account overdraft, and a higher request may trigger a GSA or PPSR registration over company assets. The letter of offer tells you which version you actually have.
"No property" can describe several different borrowers: a renter, an owner with little usable equity, a director whose property is already committed elsewhere, or an owner who simply does not want to give a mortgage. Those are not identical credit positions. Some lenders still use property ownership or recoverable equity as part of their risk model even when no mortgage is taken, which is why two businesses with similar trading can receive different limits or pricing. The property-ownership section below explains that distinction.
What does a lender look at when there is no property security?
Without property security, the file has to prove the business can carry the revolving exposure from its own conduct. Expect the lender to focus on the evidence that shows how cash actually moves through the business and whether the requested limit is proportionate to that pattern.
- Bank-statement conduct: revenue inflows, average and low balances, overdrawn days, dishonours, returned payments and how quickly temporary deficits recover.
- Trading and GST history: whether the ABN, entity and GST registration clear that lender's minimum policy.
- Turnover and existing commitments: the size of the requested limit relative to normal receipts, current loan repayments, tax payments and other revolving facilities.
- Credit profile: company and guarantor credit history, recent enquiries and any adverse events the lender's policy treats as material.
- Guarantee strength: who is guaranteeing the debt and what the lender can realistically recover if the company cannot pay.
What documents do you need to apply for an unsecured overdraft?
Most unsecured overdraft applications start with evidence of the business, the people behind it and the cash flow that will repay the facility. The exact pack varies by lender and by whether you are already a customer, but the recurring categories are consistent enough to prepare before you apply.
- Entity and identity: ABN or ACN details, director or guarantor identification, and trust deeds where a trust is involved.
- Bank conduct: recent business bank statements or transaction data showing revenue, balances, dishonours, existing repayments and the timing gap the overdraft is meant to cover.
- Financial information: profit and loss, balance sheet, BAS or other financials where the product, limit or lender requires them.
- Tax position: ATO information or Online Services reports where requested, including any liabilities or payment arrangements relevant to servicing.
- Guarantee and security information: details of directors or other proposed guarantors and any company or property security the offer may require.
Digital overdraft applications commonly ask for exactly this set, and existing-bank applications can start with less manual paperwork because the lender already holds the transaction data. The broader business overdraft eligibility and documents section owns the full application checklist.
Can a startup or very new business get an unsecured overdraft?
A pre-revenue startup will usually find an unsecured overdraft difficult because there is little or no trading conduct for the lender to assess. For businesses already trading, published minimum-history rules vary materially: current examples in the table range from no published minimum, through 12 months of registration or data, up to 2 years of trading at one non-bank. A lender publishing no simple minimum does not mean a new business is automatically eligible; normal credit assessment still applies.
If the business is new, the useful question is not only "who lends to startups?" but "what evidence exists today that proves the gap will clear?" Contracts, deposits, trading statements, owner equity and asset-backed alternatives may matter more than the overdraft label. Do not manufacture a string of formal applications while the file is still too young; the decline section below explains why repeated enquiries can become part of the next assessment.
When is an unsecured business overdraft the right tool for a cash-flow gap?
An unsecured business overdraft fits best when the problem is timing: cash leaves before normal business receipts arrive, then the balance reduces again when customers pay. If the gap does not close when the expected receipts arrive, you are no longer financing timing; you are financing a continuing deficit, and a revolving limit can hide that distinction for a while because there is no fixed amortising schedule forcing the balance down. Business.gov.au describes overdrafts as suited to short-term cash-flow gaps and cautions against relying on them for capital purchases or long-term financing.
The decision is less about the product name than the shape of the gap. The useful test is whether normal trading receipts are expected to bring the balance back down; if not, compare a structure that amortises or is tied to the asset or receivable creating the need.
- Recurring short timing gap: an overdraft or line of credit can fit because you can draw, repay and redraw.
- Known one-off purchase: a term loan or asset finance may fit better because the amount and repayment path are defined.
- Slow customer invoices: invoice finance may be worth comparing because the funding is linked to receivables rather than a general limit.
- Card-only spending: a business credit card can solve some purchase timing problems, but it does not replace an overdraft where wages, supplier transfers or other account payments are the issue.
- Permanent monthly shortfall: increasing a revolving limit may postpone the problem rather than solve it.
If this gap repeats, the best time to arrange the facility is while the statements still show clean conduct and the business can demonstrate how normal receipts will clear the draw. Once dishonours, repeated unarranged overdrawing or emergency applications begin, the cash-flow problem itself can become part of the lender's evidence.
Business overdraft vs business line of credit
The two products are close, but the access method matters. A traditional bank overdraft is attached to the transaction account, so the account itself can move below zero to the approved limit. A business line of credit is often a separate revolving facility that you draw into the operating account deliberately. Both can provide redrawable working capital, but fees, repayment mechanics, security and review terms belong to the individual offer rather than the label. The broader product comparison is covered in the business overdraft hub guide.
What is the difference between a secured and an unsecured overdraft?
The difference is not just the interest rate: security changes the ceiling you can reach, the evidence lenders weigh, the documents you sign, where enforcement starts if things go wrong, and what has to happen before you are released at the end. Set out row by row, the pattern is consistent enough to be useful.
| What changes | Unsecured | Secured |
|---|---|---|
| Typical ceiling | To $250,000 at banks, higher at non-bank on statements | Substantially higher, sized to the security |
| Pricing basis | Higher band, priced on conduct and the guarantee | Lower band, priced against the security |
| What you sign | Facility agreement plus director's guarantee, GSA at larger limits | The same plus a mortgage or specific security |
| Approval evidence | Bank statements and conduct carry the file | Valuation and security documents join the file |
| Where enforcement starts | The guarantee | The secured asset, then the guarantee |
| Release at exit | Written guarantee release, PPSR discharge if registered | The same plus discharge of mortgage |
Walk the rows and each one has a practical consequence. The ceiling moves because a secured facility is sized against an asset the lender can value, so the limit follows the asset rather than the trading pattern. The pricing basis moves because a lender pricing against realisable security is taking a different risk from one pricing against your behaviour. The paperwork moves because a mortgage or specific security instrument joins the facility agreement, which adds a registration and a discharge to both ends of the facility's life. The evidence moves because a valuer enters the file, which is why secured facilities take longer to put in place. Enforcement moves because on a secured facility the lender has an asset to go to first, whereas on an unsecured one the guarantee is the first and often only door. And release moves because every additional security instrument is another thing somebody has to formally undo.
On price, one summary line, and one only: across the major banks' own product pages read in August 2026, published unsecured overdraft customer rates ran from 14.80% to 16.25% per annum variable against secured pricing published from 8.75% per annum variable, on one bank's page sitting side by side at unsecured from 14.80% and secured from 8.75%, while Westpac published base rates only, with customer margins set at assessment. Those are published starting rates on the dates read, not a market average, not a quote and not a rate any applicant will receive. For the market average, the RBA's published lending rates statistics put the average outstanding variable overdraft rate for small business at 10.76% for July 2026 against 9.00% for variable term loans, and that series is dominated by secured facilities, which is the same security gap expressed across the whole banking book. The full rate market, the fee taxonomy and the arithmetic of what a facility actually costs to hold are covered in the hub's section on what a business overdraft costs, which is where cost questions belong.
The enforcement row is the one people skip and later regret. On a secured overdraft the lender starts with the asset it holds, and the guarantee sits behind that as a shortfall claim. On an unsecured overdraft there is no asset step, so the guarantee is where enforcement begins. The moment that distinction becomes real is when the facility is recalled rather than when it is signed, and that moment has its own ground in what to do when a bank recalls a business loan or overdraft. The same secured against unsecured comparison, run over working capital rather than an overdraft, is set out in the real cost of secured versus unsecured working capital.
What does a director's guarantee on a business overdraft actually cover?
A director's guarantee on an overdraft follows the limit, not the balance, so signing for a $50,000 facility means standing behind whatever is owed under it at the moment it is called, plus interest and enforcement costs, however the balance moved that week. That $50,000 is illustrative; the limit written into your own letter of offer is the number that matters.
A term loan amortises, so its guarantor's worst case shrinks every month. An overdraft limit does not. What a lender recovers under a director's guarantee is what is owed on the day it calls the facility, not what the account averaged, and interest and recovery costs sit on top of that figure rather than inside it.
Two features of the document decide how far that reach extends. An all moneys clause takes it past the named facility to whatever else the company owes that lender, now or later, so a guarantee given for an overdraft can end up standing behind an equipment facility taken out two years later. The second is in the title: these documents are almost always headed Guarantee and Indemnity, and the indemnity is not decoration. A guarantee is a secondary promise that depends on the company's obligation; an indemnity is a separate primary obligation, which is what lets a lender recover even where the guaranteed obligation turns out to be unenforceable. Your own document governs.
What happens to the guarantee if the company fails
The guarantee is a separate contract between you and the lender, so what happens to the company does not automatically happen to it. Winding the company up or deregistering it does not by itself discharge a guarantor, and the stays that arrive with an insolvency run against the company rather than the person behind it: sections 471B and 500 of the Corporations Act both bar proceedings against the company, and neither mentions guarantors. Resigning as a director does not retract a signature already given either, which is the question the guide to what lenders can take on an unsecured business loan answers in detail.
There is one genuine pause, and it is narrower than it is usually described. Section 440J of the Corporations Act provides that during the administration of a company, a guarantee of a liability of the company cannot be enforced against a director of that company who is a natural person, or against a spouse or relative of such a director, and that a proceeding in relation to such a guarantee cannot be begun against them, except with the leave of the Court. Four limits are built in: it runs only during the administration, it is a stay rather than a discharge, it bars beginning a proceeding but not continuing one on foot, and the Court can lift it. What happens when a guarantee is called is covered in the guide on a personal guarantee being called.
What the Banking Code gives a guarantor, and who misses out
Where a subscribing bank is the lender, the Banking Code of Practice, in force since 28 February 2025, sets out what it must do before taking your guarantee: cap your liability at a stated amount or category, carry a prominent notice telling you to get independent advice and that you can refuse to sign, give you the loan contract, the security list, the borrower's credit report and its recent financials, disclose any demand made on that borrower in the previous two years, and under paragraph 112 wait until the third day after that information is given before accepting your guarantee, a wait sometimes described as a cooling off period, though the Code frames it as a signing delay rather than a right to exit. Here is the part that catches people. A sole director guarantor of their own company is expressly carved out of most of it, the disclosure package, the separate meeting, the third day wait and the ongoing default notices included. Add a second director and the disclosure package, the third day wait under paragraph 112 and the ongoing notices come back, though the Code still exempts director guarantors of any company from some of its meeting and signing formalities, so the package stays thinner than an outside guarantor receives. Guarantors need not be directors either: lenders sometimes take one from a shareholder or another person in the business.
Every protection in the last two paragraphs belongs to the Banking Code, and the Banking Code binds only the banks that subscribe to it. Sign the same guarantee on a non-bank overdraft and the paragraph 112 wait, the disclosure package and the ongoing notices simply do not travel with you: what governs instead is the guarantee document itself, the general law, and whichever industry code the lender has chosen to adopt, with some online small business lenders subscribing to the Australian Finance Industry Association's code for that sector. The one floor worth checking before signing anything is external dispute resolution, because business-purpose lending does not require a credit licence and a business lender that is not an AFCA member sits outside the ombudsman scheme entirely, which is exactly the unregulated lending AFCA has publicly cautioned small businesses about as complaints reached record levels. Two minutes on the AFCA member register tells you which kind of lender is asking for your guarantee.
If you want a broker to read the guarantee clause before you sign, check your eligibility.
When does an unsecured overdraft come with a general security agreement?
Mostly at the top of the limit range: the clearest published trigger is one bank's unsecured overdraft running to $200,000 with a general security agreement possible between $200,000 and $300,000, and limit increases or annual reviews are where the re-papering usually happens. That band was read from the lender's own page in August 2026, and the non-bank tier draws a similar line lower down, with published product guides taking a charge over assets once a facility passes roughly $200,000. The boundary is not universal even there: Prospa publishes its Business Line of Credit to $500,000 with no upfront asset security required, which means the director's guarantee is carrying the entire facility, and that is priced accordingly.
The three moments to watch are the same everywhere. The first is the initial limit: ask for a number above the lender's unsecured band and the security schedule changes before you see the offer. The second is a limit increase, which is not an adjustment to an existing facility so much as a new credit decision on new documents, and it is the most common way a business that started unsecured ends up secured. The third is the annual review, where the lender re-examines a facility it has already written and can re-paper it on different terms even if you asked for nothing, which is why the sixty days before an overdraft facility review is time worth using.
A general security agreement is a security interest over all present and after-acquired property of the company, meaning everything the business owns now and everything it acquires later, rather than a nominated asset. That one sentence is the whole of it for the purposes of this page; what a GSA lets a lender do, what it covers in practice and what it means when things go wrong is the subject of the guide to what lenders can take under an unsecured business loan, which is the canonical treatment.
Two consequences belong here and nowhere else on this page. A general security agreement is registered on the PPSR, and that registration is visible to every other lender the company approaches, which shapes what the company's next facility looks like; that whole subject sits with the guide linked above. And a registration is not itself the security: the register records a claimed interest, while the security agreement is the contract that creates it, which is why a registration can sit on the register long after it secures nothing at all. That gap is exactly the problem the next section but one deals with.
Why do property-owning directors pay less for an unsecured overdraft?
Because some non-bank credit models price the director's own property into the rate and the ceiling even though no mortgage is taken: published rate cards in this market openly split property-owning from non-property-owning applicants, several hundred basis points apart. One non-bank's published business overdraft product guide, dated July 2026, prices a property owner at the cash rate plus 11.50% per annum and a non-property owner at the cash rate plus 15.00% per annum, a gap of 350 basis points on the same product, and caps the non-property owner at $100,000 against $500,000. Those are published rate card positions read in August 2026, not quotes. Not every lender expresses the view that way: others carry the same risk read as a lower limit cap, or gate their cheapest product on property ownership.
The logic is not that the lender secretly takes your house. It does not, and no mortgage is registered. The guarantee is the recovery path, and a guarantee from someone with equity in a property is a materially better recovery prospect than the same guarantee from someone with none. How narrowly that status is drawn is instructive: the same publisher's earlier product guide treats an owner with a high loan to value ratio or lenders mortgage insurance, an owner of less than half the property, an owner with a caveat or second mortgage already lodged, and an owner in a regional postcode below a population threshold as non-property owners for pricing. Owning a home is not the test. Having recoverable equity in one is.
Two directors come to me in the same month wanting the same limit on the same kind of business. Same turnover band, same industry, statements you would struggle to tell apart with the account names covered. One owns a home with meaningful equity in it. The other rents. Nothing in the trading file separates them, and no mortgage is taken from either of them.
They do not get the same answer. The owner lands in the better pricing tier and the limit offered sits at or near what was asked for. The renter is priced in the higher tier, and on some panels the requested limit is trimmed before it is offered rather than declined outright, because the ceiling for a file with no property behind it sits lower. The gap that opens is a positioning difference, not a rejection, and it is the most common surprise in this product.
Indicative, based on broker experience and published non-bank rate cards, as at August 2026. Not a quote, not an offer, and not a prediction of any rate, limit or outcome. Every file is assessed on its own facts and on the individual lender's policy at the time.If you are the renting director in that comparison, three things move the number. Statement conduct is the one input entirely within your control, and the one carrying the most weight when there is no property in the picture. Asking for a limit that sits comfortably inside the tier rather than at its edge helps, because a smaller facility approved cleanly is worth more than a larger one that stalls. And unsecured is not the only route: if there is a property in the picture at all, the secured version set out earlier on this page reaches a different ceiling at a different price. Being told no by a bank because there is no property behind the file is a different situation again, and not what this section is about.
What happens if the bank declines the overdraft or offers less than you asked for?
Usually you learn almost nothing: assessment at these limits is largely automated, the decline reasons stay internal, and the most common ones sit in plain sight on your own statements, dishonoured payments, ATO payment plan debits the lender can see and price, GST registration younger than the product requires, or an existing limit already near the lender's unsecured appetite. The offer that comes back smaller than you asked for, $15,000 approved against the $30,000 you applied for online, is the same event in softer clothing: the number the model would wear, not the number you needed.
What most owners do next is apply again at another bank, which adds a second credit enquiry to a file that just failed an automated read, and the second bank is reading the same statements. Complaining rarely changes a decline either, and it helps to know why before spending energy on it: AFCA's rules contain a mandatory exclusion for a lender's commercial assessment of credit risk, so the ombudsman cannot review the decision to say no or make a lender give reasons for it. What AFCA can review is conduct around a facility you already hold, how a guarantee was taken, how a review or an enforcement step was handled, for a small business under 100 employees with a credit facility up to $6.3 million, and in 2024-25 it closed 4,017 small business complaints and secured $27 million in compensation. The practical reading: the fight over a decline is won on the file, not the phone. The better order is to work out what the first read saw before anyone reads it again. That usually means closing or curing the conduct problem, waiting out a registration threshold, or moving to the tier that prices the file you actually have: non-bank overdraft assessment runs on the statements themselves rather than the product checklist, which is why the ceilings and entry markers in the table above differ so sharply from the bank rows.
The other version of this event arrives after approval, not before it. An overdraft balance is typically repayable on demand and the limit is the lender's to review, and the notice protections most borrowers assume they have are built around standard small business loans: paragraph 85 of the Banking Code says a bank may not be required to give any notice when it requires repayment of an overdraft or other on-demand facility. What that means for the review date, and how to prepare for it, is covered in the annual review section below. If the decline traces to the credit file itself, defaults, enquiries or ATO debt, the bad credit and declined guide covers that path, and if the sticking point was having no property to offer, the declined with no property guide covers the security question. If you want the file read before a lender reads it, speak to a broker about the statements first.
What happens at an unsecured business overdraft annual review?
At an annual review, the lender may reassess the limit, pricing, financial information and security supporting the overdraft. Depending on the facility terms and the lender's credit decision, the result can be no change, a lower or higher limit, different pricing or security, or non-renewal. Treat the review as a fresh assessment of an existing exposure rather than an automatic administrative anniversary.
What to fix in the sixty days before the review date, item by item, is covered in the sixty days before your overdraft facility review.
Can a bank reduce or call in an overdraft even if you have not missed a payment?
Potentially, yes, depending on the facility terms. An overdraft is commonly an on-demand facility and the limit is subject to review, so a lender can make a limit or renewal decision without treating the event as an ordinary missed-payment default. Do not assume the usual small-business default notice timetable protects an overdraft in the same way as an amortising loan: paragraph 85 of the Banking Code says a bank may not be required to give notice when it requires repayment of an overdraft or other on-demand facility.
That is why the review date, on-demand clause and cancellation terms in the offer matter before the business becomes dependent on the limit. If the facility is load-bearing for payroll or suppliers, prepare the statements and alternatives about 60 days before review. The practical preparation plan is covered in the sixty days before an overdraft facility review. If a review has already landed and the facility is being recalled, see what to do when the bank recalls a business facility.
How do you get a guarantee released and a PPSR registration cleared when the overdraft ends?
Repaying the balance does not release you: a revolving facility ends only when the limit is formally cancelled, the guarantee is released in writing, and any PPSR registration is discharged, and each of those is a separate step someone has to actually do. Which of them applies depends on how the facility ends.
| Exit event | What the lender must do | What you should hold in writing |
|---|---|---|
| Facility closed and repaid | Cancel the limit, release the guarantee, discharge any PPSR registration | Closure confirmation, guarantee release, discharge confirmation |
| Refinance to a new lender | Payout, then discharge promptly so the new lender can take priority | Payout letter and discharge confirmation, chased before settlement |
| Limit decrease | Confirm whether the security package changes | Amended letter of offer |
| Business sold | Release or novate the guarantee as part of completion | Release deed referenced in the sale completion |
The refinance row is where files come unstuck. A registration that the outgoing lender has not discharged is still on the register, and it sits in front of the incoming lender's own registration, which is a priority problem rather than an administrative one. Priority under the Personal Property Securities Act 2009 runs on what the Act calls priority time, being the earliest of registration, possession or control, and only where the Act provides no other rule for that collateral. The practical effect for a business refinancing an overdraft is simple enough: the new lender wants to be first, a stale registration stops that, and settlement waits.
When a registration lingers, there is a statutory lever, and its mechanics are usually stated wrongly. A person with an interest in the collateral may give the secured party a written amendment demand under section 178 of that Act. Section 178 itself sets no deadline. The clock is in section 179: if no application to register a financing change statement has been made before the end of five business days after the demand is given, the demander can either give a statement to the Registrar, who may then issue an amendment notice giving the secured party a further five business days to respond before the Registrar registers the amendment, or apply to a court under section 182, which cannot be done until those first five business days have passed. The two routes cannot run at once, and removal is not automatic at the end of either, since the Registrar can decline where the amendment does not look authorised; the Registrar's own Practice Statement No 4 sets out how the administrative process is actually run. Read realistically, that is a ten business day process rather than a five day one, which is why chasing the discharge is better than relying on the demand.
On the mechanics: the secured party lodges the discharge, not you and not your broker, so what you can control is the asking and the record. Get the closure confirmation, the written guarantee release and the discharge confirmation in writing and keep them together, because a verbal assurance from a relationship manager is not something a future lender can verify. Sequencing matters as much as the paperwork, and the trap of closing things in the wrong order before an application is set out in whether you should close a facility before you apply for finance. The equivalent walk at loan level, covering repay, refinance and sell, lives in the unsecured business loan guide.
What are the two types of overdrafts?
Secured and unsecured is the split everyone means, but the split that costs businesses money is formal versus informal: an approved facility on the account versus drifting past zero without one. The first split is the one covered earlier on this page, and it decides your ceiling and your price. The second decides how the next lender reads you.
A formal overdraft is an approved credit facility attached to the business transaction account, with a limit the lender has agreed to, published pricing, a facility agreement and, on an unsecured version, a guarantee. Informal overdrawing is what happens when a payment goes out that the balance cannot cover and there is no approved limit sitting behind it. The bank either honours it and charges for the privilege, or dishonours it. Neither outcome is a facility, and neither gives you anything you can rely on next month.
An approved facility beats informal overdrawing on three counts. You know the ceiling in advance, so the business can plan against it rather than discovering it at the worst possible moment. You know the price in advance, because a facility has published rates and fees where unarranged overdrawing has penalty charges applied after the fact. And it does not damage the record, which is the count that matters most later: dishonours and unarranged overdrawn days are exactly what a statement reader penalises on the next application. The practical conclusion is unglamorous. If the business is going to need the room, the time to have the facility approved is before the month it is needed, not during it.
Unsecured business overdraft FAQ
Major banks reviewed in August 2026 publish unsecured overdraft limits up to $250,000. Some non-bank revolving products advertise higher ceilings, but a headline product maximum is not necessarily a no-property or no-company-security limit. Check where the lender changes its documentation, property-ownership requirement or GSA/PPSR security as the exposure rises.
Yes. Australian banks and non-bank lenders publish overdraft or revolving-credit options that do not require a mortgage over property. Approval still depends on trading history, turnover, cash-flow conduct, credit profile, requested limit and the guarantor position, and some lenders change the security or eligibility rules at higher exposures.
Not in the same way as giving the lender a mortgage over your home. If no mortgage is granted, the lender does not have mortgage security merely because the facility is guaranteed. But a director's guarantee can make the guarantor personally liable if the company cannot pay, so personal assets can become relevant through ordinary enforcement of that personal liability. Read the actual guarantee and obtain legal advice on the document you are signing.
Yes. 'Unsecured' can mean no mortgage or nominated asset security while the facility still takes company security at a higher exposure. ANZ currently says GoBiz overdrafts up to $200,000 do not need asset security and that a GSA may be required between $200,000 and $300,000. Always read the security schedule rather than relying on the product label.
Not necessarily. A zero drawn balance is not the same as a cancelled revolving limit. Confirm the facility is closed, obtain any guarantee release or other confirmation the lender provides, and make sure any PPSR registration that should no longer remain has been ended. Keep the closure and release evidence because another lender may ask for it later.
An unsecured business overdraft works best when it solves a recurring timing gap that normal receipts are expected to clear. Major banks reviewed in August 2026 publish unsecured limits up to $250,000, while some non-bank revolving products publish higher maximums under different eligibility and security rules. No property mortgage does not mean no recourse: a director's guarantee can create personal liability, a GSA can secure company assets at some exposures, and the facility can be reassessed at annual review or be subject to on-demand terms. Ask for the limit the working-capital cycle can justify, read the guarantee and security schedule before signing, fix the reason for any decline before applying again, and treat exit as a checklist rather than a zero balance.Key takeaway: ask four questions. Does this facility fit the cash-flow problem, what limit can the file justify, what exactly have I guaranteed or secured, and what must be cancelled or released before the exposure is genuinely gone?
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