Business Loans Without Security

Consider your business loan options without having to worry about putting up any assets as collateral with Savvy.

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, updated on July 26th, 2023       

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What business loans can I get without any security to offer?

If you’re looking for a loan to support your small business but don’t have any readily available assets to use as collateral, an unsecured business loan is one of the best options on the table. These are one of the more accessible types of loan on the Australian market and are available without the need for a deposit or any kind of security or collateral. You can borrow anything from $5,000 up to around $300,000 (for a customer with a strong enough application) and can run for loan terms from less than a year up to around 5 years. They do have higher interest than you might get with a secured loan, but you get a lot of benefits for that cost.

Another possibility for a no security business loan is invoice financing. This is a kind of business finance where you pass on a collection of your unpaid invoices (i.e. the money other businesses owe you), and a lender pays you most of their value and collects those debts themselves. It’s technically a secured loan, but the only security involved is the invoices. And because you don’t need to pay the lender anything (the lender collects their money from your customers), it’s quite low risk for your business.

And if you’re in need of short-term finance with no collateral, it’s also worth considering a business credit option, such as a line of credit, an overdraft facility, or a business credit card. Once set up, these are very handy for getting fast, easy access to business funds. However, the high interest rate makes them a poor long term finance solution.

How do I apply for a no security business loan?

If you’re opting for an unsecured business loan, you’ll be pleased to know that the application process is a fairly easy one. Unsecured loans are available from a wide variety of lenders – they're one of the most ubiquitous loans on the market – and are also one of the easiest to get approved. They can generally be turned around in a matter of days, and if you choose an online lender, the application process is normally very quick and easy, and can be completed entirely online from the comfort of your own office.

The best way to start is by getting online and using a comparison website. This allows you to quickly examine a range of loans and lenders and find the best option for your business. Savvy’s website, for example, allows you to compare a range of unsecured loan options from some of Australia’s top lenders and quickly find one suited to your situation. Once you’ve done that, it’s generally an easy process to head to your chosen lender’s website and fill out an online application.

You’ll need some records and documents for your application. Different lenders have slightly different requirements, but as a baseline it’s worth having financial records and bank records for your business, personal bank statements and ID, and your business’ ABN all easily to hand. If you’re applying to an online lender, having electronic copies of these can make the process a little easier.

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Advantages of getting a business loan without security

Frequently asked questions about no security business loans

If I've taken out a business loan without security, can I add security later?

You can’t add security to an existing unsecured loan, but normally you’re able to refinance the loan – paying off the existing loan, and transferring the debt do another one with better terms. You’ll want to check your existing loan doesn’t have hefty fees for early settlement though, or you could lose some of the financial benefit of switching – it's best to know what fees your lender charges before taking the loan in the first place.

Do I need to repay a loan quicker if I don't have security?

Quite possibly. As a rule, secured loans have longer loan terms than unsecured, so you’ll generally need to pay them off sooner. There is some overlap though – so you could potentially get secured or unsecured loans with a five year term.

Can I get an unsecured loan from any type of lender?

You can get them from most types of lender. Unsecured loans are one of the more common types of loan on the market, and you’ll generally have a wide variety of options when it comes to lenders. There might be a few modern Fintechs (modern financial technologies like PayPal and Cryptocurrency websites) that don’t, but they’re generally very specialised forms of lender, and probably shouldn’t be your first port of call for a business loan.

What is business finance able to be used for?

There are myriad potential uses for business finance which you can take advantage of as an operator. For instance, you might wish to fit out the front of house at your restaurant or café to freshen it up. Alternatively, if you’re running a vineyard or microbrewery, you can purchase inventory or help cover the cost of production. Any other small business can use a loan in a range of ways, from boosting available cashflow to covering the cost of renovations or other necessary repairs.

Do I need a deposit on an unsecured business loan?

No. Unsecured loans don’t require any deposit. Sometimes it’s possible to offer one to improve the terms of your loan, but this is very much optional.

If I'm getting a business loan without any security to offer, will it help to have a guarantor?

A guarantor almost always helps – if you have someone in a relatively strong financial position who’s willing to step into that role. It’s a big ask – the person is volunteering to pick up the bill if you can’t make your repayments. But it can mean better terms on the loan, and better chances of approval.

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