Cheapest Business Loans Australia

Find out some of the key tips for locking in a cheap business loan and compare a range of offers from across Australia with Savvy.

Written by 
Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
Our authors
, updated on July 26th, 2023       

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

Business Loans Banner - Cafe owners standing behind the counter
Lumi Logo
prospa logo
Angle Finance Logo

How do I get the cheapest business loans in Australia?

To get a business loan with the lowest possible overall cost on the Australian market is quite a juggling act, and would involve a lot of different factors coming together. So what are some of the factors that would need to be in place?

  • Security or Collateral – Almost across the board, secured loans offer the best rates on the market. Having an asset locked in as collateral (meaning in the rare, worst-case scenario it could be sold to recoup the bank’s costs) means lenders can be a lot more relaxed about risk of losing money on the loan, which almost always translates into good interest rates.
  • Interest Rate & Fees – Lenders vary significantly in the interest rates they can offer on a loan. There’s also often a choice of variable or fixed rate interest, which can affect the cost of the loan over time. The fees can also vary a great deal, not just in terms of the amount but also what fees are charged – some lenders charge establishment fees or early repayment fees, others don’t.
  • The specifics of your business – Your lender will be assessing the state of your business and deciding what kind of rates to offer based on things like how old and established you are. More on this below.
  • Your business (and personal) credit rating – A lender assessing your business for a loan will routinely check both your business’ credit rating any your personal credit score. If both scores are particularly good, you could potentially get access to some of the best business loan rates on the Australian market – assuming the other factors all line up as well
  • The loan term – This is where the juggling act comes in. Secured loans almost always have the lowest rates of any loan, but secured loans normally have much longer terms than most other loans (generally starting at 5 years and going up). And longer loan terms increase the overall cost – because there’s more time for interest to accrue. As such, the cheapest loan would be a balancing act – a low interest secured loan, but with the shortest possible term to lessen the overall interest paid.

All of these factors contribute towards a loan with a low overall cost, and any one of them would help the process. But for the cheapest options on the Australian market – you'd need all of them to line up perfectly.

How can I compare different Australian business loans to find which option is cheapest?

The best way to start the hunt for the cheapest business loan if by getting online. Not only do interest rates vary widely between lenders, but they also change frequently – so it’s always important to be checking to see what the current lowest rates are, and who’s offering them. Fortunately, this is quite easy to do using an online comparison website – like Savvy. You can quickly compare a variety of business loans from some of Australia’s top lenders, and find the best rates on offer in a matter of minutes.

When comparing different loans, the base interest rate is important – a difference of a percent or two can mean a difference of thousands of dollars over the life of a loan. But don’t forget to also look at the fees, which can also make a big difference to how cheap a loan might be. Consider the comparison rate, which includes the most common fees into its total – but remember the comparison rate doesn’t include every fee possible, as some only occur in specific situations. Early repayment fees are a good one to take not off, as they affect how much it would cost to refinance the loan.

Also, if your loan has a variable interest rate, it’s worth thinking about if the current national interest rates are low or high. If they’re low, you should be prepared for loans to become more expensive if the Australian government puts the rates up – which can have quite an impact on a small business.

Types of business loan

Why compare business loans through Savvy?

What factors affect the rates your business is offered?

Frequently asked questions about cheap Aussie business loans

Will offering a deposit get me a cheaper business loan?

A deposit isn’t always necessary, but it can potentially improve your situation with a lender. If you have the resources to offer one, it’s worth discussing with the lender how that might affect the terms of your loan. Obviously, it will depend on what resources you can spare.

In Australia, does it help me get the cheapest rates on business loans if I have a guarantor?

A guarantor will almost certainly improve the terms you get on a business loan – provided they’re someone in a strong enough financial position to cover the loan if for some reason you couldn’t. It’s a big responsibility though – and not something to be taken on lightly.

What can I do to maintain a good credit rating?

There’s a range if things that can help keep your credit in a healthy place. But some of the main ones include making sure bills and loans are repaid on time, not taking out multiple loans at once, and keeping the amount owing on your credit low – less than 30% of your limit, for preference.

Will it lower the overall cost of a business loan if I make extra repayments to pay it off quicker?

Potentially yes – provided your lender doesn’t charge excessive fees for early repayments. It’s worth checking what fees apply to early repayments when you’re still deciding on a loan, rather than finding out once you’re locked in. On the other hand, some loans actually encourage early repayments – with

Is it possible to get cheap Australian business loans in a hurry?

As a general rule, fast and cheap don’t go together well in the loan world. The most affordable loans on the market are generally secured business loans, and secured loans are notoriously slow to process. You can get fact loans with relatively low rates. But they won’t be the cheapest loan rates.

Is it possible to take out a business loan without any interest?

Not really – while government grants offer operators funds to dedicate to certain aspects of their business, interest-free loans aren’t generally an option. There are still many loans which charge an affordable level of interest and grant you the freedom to use the approved funds however you wish.

Helpful business loan guides

Business Loans Banner - Food truck business owner standing in front of his food truck

Interest-Free Business Loans

Find out more about interest-free business loans, what they are and how they work in this handy guide. If your...

Business Loans Banner - Businessman smiling while comparing the best loans on his tablet

Best Business Loans

Compare your business loan options and choose the best for you from Savvy's range of partnered lenders today. Compare business...

Business Loans Banner - Barista standing next to a black board serving a customer

Finance an Existing Business

Find out more about how to finance the purchase of an existing business right here in Savvy's guide. Buying a...

Business Loans Banner - Mechanics working on a car

How Do Business Loans Work?

Learn about what business loans are and how they work before you apply for finance. If you’ve thought about starting...

Business Loans Banner - Recruitment agent interviewing a man while holding a notebook

Bridging Finance For Business

Find out more about what bridging finance is and whether it's right for your business here. How does business bridging...

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.