The 60 Days Before Your Overdraft Facility Review
What a lender re-checks at a business overdraft annual review, what to fix in the sixty days before it, and how to ask for more rather than less.
Business Owners Hub
Business Overdraft · Annual Review · Working Capital
Most operators treat the annual review as paperwork that happens to them. It is an assessment, it is scheduled, and the window to change its outcome opens about two months before the date on your letter of offer.
Quick Answer
A business overdraft annual review is a lender reassessing a facility you already hold, against how you have actually traded since approval. Use the weeks before the review date to clean the trading account, assemble the review pack, and decide whether you are asking to hold the limit or to lift it. See our business overdraft guide for the product mechanics.
Also called: annual facility review, overdraft renewal.
What is a business overdraft annual review
A business overdraft annual review is a lender's scheduled reassessment of a facility you already hold, using the trading you have done since it was approved, and not the renewal formality most owners treat it as. It is not an application and it is not a default event. It is the lender asking, on a diarised date, whether the limit it granted a year ago still matches the business in front of it now.
Facilities are commonly reviewed on an annual cycle, and the cycle varies by lender. A shorter cycle is typical where trading is seasonal, where security is unusual, or where the facility was written with conditions attached. Three outcomes are available to the reviewer: the limit holds, the limit moves, or the conditions change. Nothing at all happening is the most common result, and it is also the one nobody writes about.
The distinction that matters most is this one: a review is not a recall. A recall is a lender demanding repayment of a facility, usually after something has gone materially wrong. A review is a routine re-test that can end in a reduction if the file has drifted. In deals I have seen, the operators who get hurt at review are almost never the ones whose business declined. They are the ones who had a fine year and could not evidence it inside a fortnight. If a facility has already been called or not renewed, that is a different problem with a different route, covered in our guide to a bank recalled or non-renewed facility.
When does your facility review date fall, and how do you find it
Your review date is stated in your letter of offer, and that document is the only reliable source for it. It is usually expressed as an anniversary of settlement or as a fixed calendar date, and it sits near the conditions precedent rather than at the front of the document where you would look for it. If you cannot find the letter, your lender's business banking team will confirm the date on request, and so will your broker if the facility was arranged through one.
Two things commonly go wrong here. The first is that the operator assumes the review date is the anniversary of when the money first landed, when the offer actually dates it from execution. The second is that a facility rolled or varied mid-term reset the date and nobody noted it. Both are worth thirty seconds to check, because the entire plan below is dated backwards from that one number.
Once you have it, work backwards approximately sixty days and put that in the diary as the real start. That is roughly the point at which a bad month can still be offset by a good one, an overdrawn pattern can still be corrected in the record, and an accountant can still produce interim figures without treating it as an emergency. Inside a fortnight, you are presenting whatever you already have. For how the same evidence supports a fresh facility, see our business line of credit and overdraft page.
What a lender re-checks at review that it did not check at approval
At review a lender re-checks the same fundamentals it assessed at approval, plus one category it could not assess at approval: how you have actually run the facility. That single addition is what makes a review different from an application. At approval the lender was forecasting your conduct. At review it is reading it.
The traditional frame commercial credit teams use is the five C's, and it maps cleanly onto what a reviewer opens. Character becomes conduct on the account. Capacity becomes serviceability tested against the last twelve months rather than a projection. Capital and collateral are re-confirmed rather than re-established. Conditions covers both the trading environment and any covenants written into the offer.
| What is re-checked | What the reviewer is asking | What answers it |
|---|---|---|
| Conduct on the facility | Did the account return to credit, or has the limit become a floor? | Twelve months of trading account statements showing the swing |
| Turnover against expectation | Has income tracked what supported the original limit? | Interim profit and loss plus year to date banked turnover |
| Serviceability | Can the business support the facility on current numbers? | Latest financial statements and tax portal position |
| Covenants and conditions | Has every condition in the offer been met and evidenced? | The covenant schedule with a supporting figure against each |
| Credit file and ATO position | Has anything appeared that was not there at approval? | Current credit report and lodgement or arrangement status |
| Security position | Is the supporting security still worth what it was? | Valuation currency and any change in ownership or encumbrance |
One environmental note, because operators ask. In a flat rate environment, a review turns on your trading behaviour rather than on the rate. When pricing is not moving, there is very little for a reviewer to attribute a change to except conduct, so the record of the past year carries more weight than usual. That is a reason to prepare, not a reason to worry.
What your trading account looks like to a reviewer
Your trading account is the primary document at review, and a reviewer reads it as a shape rather than as a balance. What they are looking for is movement: does the account swing down into the facility and come back up again, and does that rhythm match the working cycle the business claims to run. A facility that breathes is doing its job. A facility that sits at the limit month after month is no longer working capital, it is term debt in the wrong wrapper, and reviewers price it accordingly.
Three patterns get attention. Sitting at or near the limit for consecutive months suggests the facility is funding a structural gap rather than a timing one. Frequent dips below the limit for a day or two suggests the limit is close to right but the buffer is thin. Never touching the facility at all can also draw a reduction, because an unused limit is capital the lender has committed and is not earning on. If your cashflow genuinely improved and you no longer need the headroom, that is worth saying explicitly rather than leaving the reviewer to infer it.
From the reviewer's side of the desk, none of this is forensic. It is a scan for whether the story on the statements matches the story in the file. For how the same reading drives the number itself, see how a business line of credit limit is set.
What to fix in the sixty days before the review date
What you fix in the sixty days before the review date is anything that would make a reviewer ask a question you cannot answer in one sentence. The window matters because most of these items need weeks to show up in a record, not days. A cleaner account in the final fortnight changes nothing; a cleaner account across the final two months changes the shape of the last statement cycle a reviewer will read.
The sixty day run in to your review date
Two of these carry more weight than the rest. Lodgement gaps are the most common avoidable finding, because they are visible, dated, and read as an administration signal rather than a trading one. Personal spending run through the trading account is the second, because it makes the working cycle harder to read and invites the reviewer to discount turnover they cannot cleanly attribute.
What evidence to send with the review pack
The review pack is the bundle you send ahead of the review date, and its job is to answer every predictable question before it is asked. Lenders differ on what they formally request, and some will ask for very little, but a reviewer who receives a complete pack unprompted forms a view of the operator before they form a view of the numbers. That is not a small advantage.
What belongs in it
Twelve months of trading account statements. The most recent full financial statements plus an interim profit and loss and balance sheet. A current annual turnover figure with year to date banked income. The covenant schedule with a supporting number written against each condition. Aged receivables and payables where the business carries either at scale. Tax lodgement status, and where a payment arrangement exists, the arrangement terms and the payment history against them. Any material change since approval, described in one paragraph.
What does not belong in it
Forecasts unsupported by trading history, and explanations longer than the evidence they explain. If a month looks wrong, one line stating why beats a page of context. Reviewers read a great many of these; brevity signals control.
Where the pack shows the facility has been carrying a structural gap rather than a timing one, expect a conversation about restructuring rather than renewing. That is not a bad outcome, and it is often the right one. Our note on how a line of credit and overdraft actually work covers where the revolving structure stops being the right fit, and the business owners finance hub collects the alternatives.
How to ask for a limit increase at review instead of a reduction
You ask for an increase at review by making the case in the review pack itself, before the reviewer has formed a position, and by tying the number to the working cycle rather than to ambition. A review is one of the few moments when a lender is already looking at your file with fresh information in front of it, which typically makes it the least expensive point at which to ask. In deals I have seen, the request that lands is nearly always the one that arrives with the pack, not the one raised after a decision has been drafted.
The structure that works is short. State the current limit and the current trading pattern. Show the point in the cycle where the facility runs closest to the ceiling. Name the specific driver of the additional need, whether that is a longer receivables cycle, a larger stock position, or a contract that pushed the low point further down. Then state the limit you are asking for, and why that number and not a rounder one. A request tied to an observable trough in the account reads as operational. A request for a round number reads as a wish.
Be realistic about what an increase is assessed against. It is a fresh credit decision inside a review, so credit assessment applies in full, and security or a director's guarantee may come back into the conversation. If the lender will not move, a broker can test the same request across other funders while your existing facility stays in place, which is a materially better position than testing the market after a reduction. If a dispute arises about how a facility has been handled, the Australian Financial Complaints Authority is the external dispute resolution scheme Australian credit providers belong to.
For a side by side read of where the overdraft structure earns its place against the alternatives, see line of credit versus bank overdraft, or start a conversation about your review before the date rather than after it.
An overdraft review is a scheduled reassessment, not a formality and not a threat. The lender re-tests the same fundamentals it assessed at approval, plus the one thing it could not assess then, which is how you have actually run the facility. The trading account carries most of that story, the review pack carries the rest, and both are things you can shape if you start early enough. The operators who arrive at the review date with a complete pack and a specific ask are the ones who leave with the same limit or a better one.
Key takeaway: find your review date, count back approximately sixty days, and use that window to fix conduct and assemble evidence rather than defending both on the day.Frequently Asked Questions
A business overdraft facility is commonly reviewed on an annual cycle, and the cycle varies by lender. Some facilities are written with a shorter cycle where trading is seasonal or the security position is unusual, and some are reviewed early if a lender sees something on the trading account it wants to understand. Your letter of offer states the review date, and it is the only reliable source for your facility. The product mechanics behind the cycle are covered in our business overdraft guide.
An Australian lender can reduce, increase or withdraw a business overdraft at review, because the facility is repayable on demand under most letters of offer. That power is real but it is not usually exercised without warning, and a review is not a recall. If a facility has already been called or not renewed, the route out is covered in our guide to a bank recalled facility rather than here.
At review your business overdraft account keeps operating while the lender reassesses the limit behind it, so day to day access typically continues unless the lender tells you otherwise. The reviewer reads the trading account for the past year, compares it to the numbers that supported the original approval, and forms a view on whether the limit still matches the working cycle. What changes after a review is the limit, the conditions, or nothing at all. The underlying line of credit mechanics do not change at review.
The five C's of commercial lending are character, capacity, capital, collateral and conditions, and a facility review is a re-test of all five on updated information. Character and conditions are the two that move most between approval and review, because conduct on the account and the trading environment both change inside a year. Capacity is read through serviceability and the working cycle rather than through profit alone.
A business overdraft typically takes a few weeks from a complete file to a formal offer, and the timing varies by lender and with how clean the trading account looks. A review of an existing facility usually moves faster than a new application because the lender already holds the history, though an incomplete review pack will stall it just as effectively. Starting approximately sixty days out is what keeps the timing comfortable, and our working capital entry explains what the facility is being sized against.
FBAA Accredited
