Last Updated: 15th December, 2022


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If you run an import or export business, there can be a heavy strain on your cash flow.

A multi-option facility (MOF) can help by bringing all of your separate credit facilities under one account, making it easier to manage your credit limits when you need to extend them.

So if you have a combination of invoice discounting, trade finance and business overdrafts, a MOF can give you the flexibility you need when managing your business finance.

What is a multi-option facility?

A MOF is simply a solution for business owners to put all of their commercial loan and business finance facilities “under one roof”, with one overall limit.

The main benefit is that you can easily control how this limit is spread across your loan facilities.

So in many ways it works like a tap where if you need to extend the limit, for instance, on your invoice financing, you can simply simply reduce the limit on your overdraft.

What kind of facilities can operate under a MOF?

How do I qualify?

Generally speaking, multi-option facilities are only offered to businesses with total loan facilities over $5 million.

The administration costs of keeping a MOF open can be high so the bank wants to make sure that they’re lending to a client who will be using the umbrella facility on a regular basis.

Like most other types of business and commercial finance, multi-option facilities are generally secured against a combination of a company’s debtors book, stock and plant equipment or residential and commercial property.

Bear in mind that the overall MOF limit cannot exceed the limit set out in the offer documents.

Although there is no term on the facility, a transaction fee will be charged when changing the overall limit or closing down the multi-option facility.

What are the benefits?

The main benefit is avoiding a lot of the backwards and forwards that happens when dealing with your bank when you want to extend or reduce the limits on separate loan facilities for your business.

It’s best to think of it more like a structure solution rather than an everyday option.

It’s not necessarily a cheaper option than having separate facilities open but it may help to save some costs since you have one flexible limit rather than underutilised limits on stand alone facilities.

Because of that, a multi-option facility is a great option if you’re in the import or export industry where there can be long lead times between in getting paid.

It’s also a good solution when managing production capital, payroll and rent and trying to keep cash flow in the business.

Multi-option facility case study

John is an importer of heavy equipment for farming and agriculture.

There’s quite a large lead time in that it take about 5 weeks for the parts to be imported from Germany.

Once John receives the parts, his business spend around 10 days assembling the parts in their workshop.

Even when the tractors and other agricultural machinery is ready to ship, John’s business has payment terms of up to 30 days in place with most of his clients.

In total, John is is looking at over 3 months to be paid for the equipment he imports.

To keep capital flowing in the business, John could use trade finance to fund some of his imports and then an overdraft facility to pay out the trade facility.

The debt would then be carried in the overdraft facility until payments are received from his customers, after which the debt in the overdraft will be cleared.

That’s all pretty straightforward but in John’s business things rarely go to plan!

John finds that he needs to extend the payment term for one of his larger clients.

Instead of having to approach the bank to increase his overdraft limit, a multi-option facility allows John to simply shift across the limit from his trade facility to his overdraft.

Do you need a multi-option facility?

Discover if a multi-option facility is right for you!

Call us on 1300 889 743 or complete our free assessment form to speak with one of our business loan specialists.