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Yes - you 'borrow' a bank bill, this is a short term loan with the interest prepaid. It is the bank using it as a term deposit - (instead of you taking out a term deposit and the bank either prepaying you interest or paying during the term/at the end), the bank is giving you money and...

I have used them to finance property - from Y-man's example but.... You take out $270k from LOC at 5.5%. You buy a 180 day bank bill for $277,425 - Essentially, you capitalise the interest. At the end of 180 days you refinance it for the face value of $277,425 + ?? interest for the next...

I have used BB in lieu of a term loan. Interest is prepaid and included in the amount forwarded by the bank. Eg: $500k BB for 180 days includes interest at x% + bank margin. At the end of the 6 months, you take out a new BB (if the bank will offer you one). It is in effect a loan and is secured...