The features and benefits of business loans in Australia
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.
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.
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.
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.
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.
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.
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
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.
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.
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.
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.
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 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.
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.
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.
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.
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.
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?
Top tips for increasing the speed of your business loan application
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.
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.
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.
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
Helpful business loan guides
Still looking for the right finance for your business?
Explore a range of business loan options suitable to your financing needs and apply online through Savvy today.