A line of credit gives you flexibility to meet your short-term business goals. You can use a line of credit for just about anything – unplanned expenses or seizing opportunities, managing accounts receivable gaps, making lots of small purchases or regular large expenses that are cyclical and ongoing. It’s also useful when funds are only needed for a very short period of time.

It’s important to choose the option that best suits your business. With Prospa’s business loan, you borrow a set amount of money, get it all at once and pay it back over a set period of time. Your repayment amounts are fixed and at the end of the loan term, your balance will be zero.

With Prospa’s line of credit, you have access to a specific amount of money but you don’t pay anything until you start to access the funds. After that you only pay interest on the amount you’ve borrowed, not your entire credit limit. Prospa’s line of credit is revolving, which means you can tap into it again and again without re-applying.

As an example, if you have a $25,000 line of credit and borrow $10,000, you still have access to $15,000 when you need it. If you repay the $10,000 then you will have access to the full $25,000 line of credit.

You can use your line of credit whenever you need it, without re-applying, which gives you more flexibility, and you can access the funds easily using our online dashboard to see your balance, draw funds and view your transaction history.

The total amount of your line of credit will depend on the specific circumstances of your business. We consider a variety of factors to determine the health of your business and based on this information, Prospa may be able to provide you a line of credit up to a maximum of $25,000. If you need more than this amount, keep in mind our small business loan which can give you access to a maximum of $250,000 as a lump sum.

The limit of your line of credit, and your interest rate, will be based on our assessment of the creditworthiness of your business. Interest is accrued daily and charged weekly. To find out more about our rates, please call our friendly team on 1300 220 215.

You should note that with fixed-term small business loans you will have predictable repayments and know the total cost of credit before you receive the funds. While Prospa’s line of credit has a fixed interest rate, your weekly repayments will vary, based on how much of the principal you have borrowed and when you repay it.

You may pay a bit more for the convenience of a line of credit compared to our small business loan. It’s important to choose the product that best suits your business.

When you are approved for a Line of Credit limit, it is valid for 12 months. At some point during the 12 months we will need to re-evaluate your business situation in case anything has changed. This can be done easily over the phone. We will then either extend your line of credit for a further 12 months, or we will provide a minimum of 90 days’ notice your line of credit will not be renewed. You can choose to convert your outstanding balance into a Prospa small business loan with fixed repayments of principal and interest.

When you draw down on your Line of Credit, we will set up a payment schedule with weekly payments over 12 months. The weekly payment will include interest and any applicable fees. For example, the first time you draw down on the Line of Credit you will be charged the one-off establishment fee. Once a month, your weekly payment will also include your monthly service fee.

You don’t need to worry about missing a payment, these will be automatically debited from your nominated business bank account.

You can choose to pay just your interest charges or you can make additional repayments of principal at any time at no cost. It’s up to you.