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The difference between a business loan, credit card and overdraft

All are types of loans; however there are key differences and benefits to know about each.Business loan

A business loan is a lump sum of money we lend you, where you can choose from different interest rate options such as fixed or variable and the frequency of repayments like monthly, quarterly or yearly. Your repayment amount is typically worked out over 1 to 30 years and you can use different types of security such as cash, residential property, commercial property or business assets.

A business loan may be suitable for customers who require funding for things like business acquisition or start-up, capital investment, property acquisition or development, or refinancing other lending.


Business credit card

A business credit card is a card where we give you access to money on credit, called a credit limit. When you buy things with the credit card, you can either pay off the money you owe each month or carry a balance and we charge you interest on the balance.


Note: Most Westpac business cards typically have 55 days before interest is charged on the purchases you make. Remember, interest free periods may not apply with respect to cash advances.

A business credit card may benefit you to even out your cash flow and handle expenses during the interest free period. Some business credit cards offer rewards points when you spend, so you can redeem these for flights, groceries and other things. You can also order additional business credit cards for your staff, so they can make purchases for the business.


Business overdraft

An overdraft is an approved extra amount of funds attached to your business transaction account, which you can draw down when you need. Pay what you can, when you can - as long as the overdraft stays under the agreed limit.

A business overdraft may benefit you with cash flow relief with money to cover expenses, such as purchasing stock, paying invoices and wages until you get paid by your customers.

Use our handy loan finder tool

Our Business Loan Finder will show you options to suit your business needs and takes about 1 minute. Lending criteria, Terms & Conditions apply.

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Funding your equipment and vehicles

Just about every business will need to spend on equipment, even if it’s just for a computer and mobile phone.

Managing your cash flow

To give your business the best chance of success, it’s important to start with a clear idea of the costs involved, both to start the business, and then to keep it running.

I want to receive payments

Accepting and making payments is crucial to your business. The quicker you're paid, the healthier your cash flow will be.

Things you should know

1.  Lending criteria, terms and conditions and fees and charges apply.

This information does not take into account your personal circumstances and is general. It is an overview only and should not be relied upon. This information including any tax information provided in this article should be used as a guide only. We recommend that you seek independent professional legal and tax advice about your specific circumstances.