Business Loans Australia

Name: Business Loans Australia
Creator: Savvy
Published: 2021-12-22T16:37:02+10:30

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It won't affect your credit score.

Written by , updated on September 21st, 2023

The features and benefits of business loans in Australia

Competitive interest rates

By comparing the top offers in the market, you can narrow down the lowest, most competitive business loan interest rates from Australian lenders and secure a cheaper deal for yourself.

Borrow what you need

Business loans can be used for large or small purposes, with loans available from just $5,000 up to $500,000 ensuring they’re versatile for just about any business need.

Repay over up to five years

You can also set the term over which you repay your loan to suit your and your business’ needs, with lengths as short as three months up to five years able to be chosen.

Unsecured financing

We work with lenders who offer unsecured small business loans in Australia, meaning you won’t have to put any form of valuable asset up as collateral for your loan.

Pay out your loan early

Our lending partners include those who won’t penalise you for paying out your loan ahead of schedule, allowing you to get your finance deal off the books more quickly and save.

Online process from start to finish

You don’t have to leave your home when applying for your loan, with a simple online application process enabling you to apply for and settle your loan from your smartphone.

Increase flexibility with a line of credit

If you want to access funds whenever you need them from a revolving credit account, you can instead opt for a business line of credit to add greater flexibility to your finance deal.

Tax-deductible

The interest you pay on your business loan is tax-deductible, potentially saving you thousands of dollars over the life of your loan to be spent elsewhere around your business.

Types of business loan

Unsecured business loans

The most common type of business finance, unsecured loans enable businesses to access the funds they need without attaching an asset to the loan as security. Some lenders may allow you to borrow up to $500,000 and, because there's no collateral, offer same-day approval.

Secured business loans

If your business already owns valuable assets, such as property or expensive equipment, you may choose a secured business loan instead. These loans may increase your borrowing power beyond what an unsecured loan can offer and, crucially, typically come with lower interest rates.

Small business loans

Business loans don't always have to be worth hundreds of thousands. If you're operating a small business and need a boost to help you keep on top of your expenses or expand your company, you may be able to take out a loan starting from as little as $5,000 and unlock further capital.

Low doc business loans

Just because you don't have all the required documents for a standard business loan doesn't mean you're out of options. Low doc finance enables you to use alternative documentation, such as other business financials, in the application process to access the funds you need.

Lines of credit

A commercial line of credit allows you to draw from your loan account whenever your business needs access to their funds, instead of managing a lump sum and repaying it like a regular loan. This can add flexibility to your finance arrangement, providing money when you need it.

Invoice finance

Invoice finance presents another option to business operators looking to free up cash through outstanding invoices yet to be paid by their customers. Your invoice finance can either be invoice discounting or factoring, which present different options when it comes to your invoices.

Equipment loans

A common reason for seeking out a loan is to purchase commercial equipment. You can do this either with an unsecured arrangement or one with the equipment itself as collateral, with the latter potentially increasing your borrowing power and lowering your interest rate.

Supply chain finance

With this finance, when your business purchases product, your supplier provides an invoice which you send to your financier and pledge to repay by a set date. From there, your supplier sells the invoice to your financier at a discounted rate, while you repay the full amount to your financier.

Inventory finance

Under an inventory finance agreement, your lender pays your supplier directly for inventory, which allows it to be signed off and sent to you. From there, you can pay off your debt within a pre-determined period to your lender, which may be longer than the regular debtor period.

Overdraft facility

An overdraft facility is attached to an existing financial account belonging to your business, such as a transaction or savings account, and enables you to borrow up to a set limit after the account’s balance reaches zero. These overdrafts are repaid with interest, but only on what you use.

Cash flow loans

You may simply be in a position where your business needs a boost to its cash flow. If this is the case, there’s a range of stop-gap solutions which may be suitable for your situation, from standard unsecured loans to specialist cash flow loans, invoice finance or even an overdraft.

Why compare business loans through Savvy?

100% free service

It won't cost you a cent to compare a range of business loans through Savvy, enabling you to come back at any time.

Reputable lending partners

You can compare business loan offers through a range of trusted Australian lenders, giving you more confidence in the process.

Online comparison process

You can fill out our simple online form to generate business finance quotes tailored to your business' needs in minutes.

Top tips for increasing the speed of your business loan application

Have all your documents ready

Review your lender’s documentation requirements before applying so you can prepare all of the required pieces of information for submission. Some lenders will require more pieces than others, but you’ll always need to supply your ABN/ACN and GST registration, personal identification such as a driver’s licence or passport and your business bank account details. In some cases, you’ll be required to provide business financials like tax returns, accounts receivable and payable, profit and loss statements and a financial plan.

Apply earlier in the day and week

Although it may seem trivial, getting your application in as early in the week as possible can help you avoid the process dragging out over several days. If you apply on a Monday morning, for instance, you can have your funds available as early as Tuesday morning. In contrast, an application on Friday afternoon could feasibly take until late on Monday or early Tuesday to be fully processed and transferred.

Look after your credit score

Your business’ credit score is a key factor in the type of loan you’re approved for. If your score isn’t the highest, you can look to several strategies which may boost it, such as reducing the limits on your business credit cards, paying off outstanding debts or continuing to do so in a prompt and timely manner. The higher your credit score, the greater the chance of sailing through the application process and receiving immediate approval at the first attempt.

Only apply for what you need

The best way to approach your business loan application is with a firm idea of what you need as a business. It's often useful to map out exactly which expenses you’re looking to have covered by your loan to ensure you’re not simply shooting in the dark with your application. Determine what you need: are you looking to add to your business’ cashflow, cover a tax debt, help pay for refurbishment or something else? Only applying for what you need will hold you in good stead throughout the process. You can use our repayment calculator to help estimate the cost of different loans.

Common questions about business loans in Australia

What can I use a business loan for?

Pretty much anything you need – provided it’s business-related. Businesses large and small can use loans for an array of purposes, from contributing to their cashflow to fitting out their premises to purchasing another business. Many business owners will use their funds to help cover staff wages, while others might wish to buy substantial equipment they can’t quite afford to pay for upfront. Alternatively, if your business has built up sizeable debts, you can consolidate them into one loan to manage them more easily and potentially save money over the course of your loan.

Do I have to make a personal guarantee?

Not always – we work with lenders who won’t require you to supply a personal guarantee or that of one of your company’s directors as part of your medium or small business loan application. Personal guarantees essentially act in the same way a guarantor would for a home loan: by doing so, you’re guaranteeing the repayment of the loan to your lender, even if your business becomes unable to manage its repayments.

Can I get a business loan in Australia if I’m a temporary resident?

Yes – some lenders in the market can approve temporary residents for small business loans in Australia. However, not all visas are eligible to receive loans or start a business, so you’ll need to cross-reference this with your lender. You’re likely to require a Business Innovation and Investment (Provisional) visa (subclass 188). Additionally, you’ll need to make sure your loan is completed several months prior to your visa’s end date.

How long do I have to work to qualify for a loan?

Most lenders will require you to have been running your business for at least six months before you apply, but some raise this to a minimum of 12 months. Alternatively, there are specialist lenders who can approve startup business loans in Australia, meaning there won’t be a minimum requirement. However, they come with significantly reduced borrowing power and higher business loan interest rates, as well as greater scrutiny on your personal credit file and whether you’ve run businesses in the past and/or have skills transferrable to the business you’re starting up.

What cashflow does my business need to be approved?

Lenders will always set a minimum monthly or annual turnover as part of their set of eligibility criteria. This minimum, in some cases, will sit at around $5,000, although others may require a more substantial annual turnover of greater than $100,000. Always check your lender’s criteria before applying to make sure that your business is generating enough money to qualify.

Can I be approved for a loan if my business has seasonal income?

Yes – seasonal businesses can access business loans, but they’re likely to look slightly different to the standard personal loan. These may be agricultural businesses or those who rely on warm weather. Because of a lack of business in their off-season, lenders consider these types of businesses a greater risk, which can attract higher rates and reduced borrowing power in some cases.

Am I able to supply security for my business loan?

Yes – providing an asset as security for your loan can help you substantially increase your borrowing power and reduce your interest rate. This is because they’re considered safer by lenders, as they have something to fall back on in the event you become unable to support your repayments. You can utilise either commercial or residential property as loan security, as well as vehicles, equipment and appliances (which is known as equipment finance). These loans often take longer to process, as they’re generally larger and require lenders to assess the suitability of your asset.

Should I just use a business credit card instead?

Not necessarily – if you’re looking to make smaller purchases that can easily be paid off quickly, a credit card might be a good option for your business, as they’re convenient and sidestep the need to apply for financing. However, if you want to make a more expensive purchase and aren’t likely to be able to pay it off within your card’s interest-free period, you might be better off with a loan. This is because any outstanding balance on a credit card will attract considerable interest and fees, which are usually much higher than those of unsecured business loans in Australia.