Non-Bank Business Loans

Consider your options outside the big banks when it comes to financing your business. Compare offers with Savvy.

Last updated on June 15th, 2022 at 04:11 pm by Bill Tsouvalas

Compare non-bank business loans

Business operators aren’t just limited to banks when seeking out additional finance to cover their expenses. With online finance now bigger than ever, it’s important to compare offers beyond the traditional picks. Consider a variety of offers right here with Savvy to help you make the right call and save.

site-logos OnDeck Business Loan
  Min. Loan Amount Max. Loan Amount Loan Term Establishment Fee Annual Fee  
site-logos $10,000 $250,000 6 to 24
Months
3% $0
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Lightning business loans up to $150K can be funded in as fast as 2 hours - simply provide 6 months of recent bank statements.

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site-logos Lumi Unsecured Business Loan
  Min. Loan Amount Max. Loan Amount Loan Term Establishment Fee Annual Fee  
site-logos $5,000 $500,000 3 to 36
Months
2.5% $0
Go to site

Boost your business with fast hassle-free funding from Lumi. Apply online in five minutes without harming your credit score and get funds in as quickly as 24 hours. For a limited time: Business Loans with No Repayments for the first 6 weeks. T&C apply.

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site-logos Lumi Lux Rate Reducing Business Loan
  Min. Loan Amount Max. Loan Amount Loan Term Establishment Fee Annual Fee  
site-logos $200,000 $500,000 12 to 48
Months
3.50% $0
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Lumi Lux™ is an innovative rate-reducing business loan that rewards customers with good repayment histories and no contractual breaches throughout their loan term by dropping interest rates by 25 basis points (0.25%) every six months

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site-logos Valiant Finance Business Loan Broker
  Min. Loan Amount Max. Loan Amount Loan Term Establishment Fee Annual Fee  
site-logos $5,000 $1,000,000 3 to 60
Months
$0 $0
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Valiant is Australia’s leading business loan broker with a network of over 80+ lenders. Apply for a business loan between $5,000 and $1 million and get approved in as little as 24 hours.

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site-logos ebroker Unsecured & Secured Business Loans
  Min. Loan Amount Max. Loan Amount Loan Term Establishment Fee Annual Fee  
site-logos $5,000 $3,000,000 6 to 360
Months
$0 $0
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Compare, find and match fast to over 80 bank and non-bank lenders accessing much needed working capital from a unsecured business loan.

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Disclaimer: Savvy is not advising or recommending any particular product to you. We provide general information on products for the purposes of comparison, but your personal situation or goals are not considered here. Although we try to make our comparisons as thorough as possible, we do not have information on all products on the market on our site.

You should always consult a given offer's PDS or further documentation in the process of deciding on which loan to choose, as well as seeking independent, professional advice. If you decide to apply with one of the lenders listed above via our website, you will not be dealing with Savvy; any applications or enquiries will be conducted directly with the lender offering that product.

Non-bank business loans

What options are there for a non-bank business loan?

In Australia today we now have a very wide variety of business lenders, and there are many options to choose from if you’re not keen on borrowing from a bank. Some of the more common non-bank business lender choices on the market are:

  • Credit unions – Credit unions are a good choice if you don’t want to use a bank, but you’re looking for something relatively similar in the way it operates. Banks have a lot of the same facilities as a bank – including local branches and ATMs. But credit unions are member run not-for-profit organisations, meaning the profits tend to go to members rather than shareholders (this is often shown through cheaper rates and lower fees).
  • Online lenders – Online lenders have particularly come to the fore in the last decade or two, and have now become very common and widely used. Online lenders operate through the world wide web, and use encrypted internet technology to conduct most of their business. The advantage of this model is that it’s very efficient – online lenders don’t need to set aside profits for running local branches, and those lower overheads can translate to very competitive loan rates.
  • Fintechs – As technology has evolved, so has the lending industry, and Fintechs (short for “Financial Technology”) is the catch all phrase for some of the modern websites and internet services that deal with money, finance, credit and non-traditional business loans – PayPal being one of the oldest and best-known examples. These can be highly specialised and not all of them qualify as a “lender” as such, but there are Fintech which do have lending services.

Some of these options have been around many years, and are now quite well established. Others are enjoying almost explosive growth in recent years. Either way, it’s pretty clear that the big banks aren’t the only lenders on the block anymore, and there’s many loan choices for businesses who prefer not to deal with a bank.

How do I compare non-bank commercial loans to find the best for my business?

As varied as your choices might be for loans and lenders, the question of “what will this loan cost me overall” is always a good place to start.

Nowadays it’s easier than ever to compare different loans and the rates they offer. Comparison websites now allow you to get online and very quickly weigh up a range of loan options to find the best offers for your business, both with loans from private lenders and those from big banks. Savvy’s a good example of this: you can compare a variety of loan types from a range of Australia’s top lenders and quickly find a loan to suit your business.

When it comes to choosing what type of lender you might want to go with, there’s a few questions that are useful to ask.

  • Do I prefer working online? – If you have a preference for doing things from your own office via the internet then an online lender or Fintech might be a great choice. If you prefer talking face to face with a customer service rep, then a Credit Union might be a better choice.
  • Do I want something quick and simple, or clever with lots of options? – If you’re keen on the business loan process being super simple, then online lenders could be a fairly good choice. In addition to being easily accessible, online lenders tend to have quite simple application processes – they can use secure online services to access things like credit information and simplify the process. If you’re more interested in getting your head around clever uses of finance and using technical
    innovation to your advantage, it might be worth investigating some of the modern Fintechs.
  • Do I want to offer collateral to get better rates? – Secured loans are generally something that takes a bit of human brainpower – it’s hard to automate assessing security. As such, if you’re going with a secured business loan of some type, a Fintech might not be the place to start looking.

Pros and cons of non-bank lenders

PROS

Flexibility with rates

Non-bank lenders are generally privately owned, with allows them more flexibility with fees and rates than a bank.

Better service

Smaller organisations like Credit Unions and online lenders tend to be much better with their customer service – as anyone who’s ever delt with a large bank’s automated call centre could generally tell you.

Fewer conditions

Because smaller lenders are more centralised with less bureaucratic organisation, their decision making can be simpler. This can often mean simpler conditions on a loan.

Remote Lending

Not needing to visit a branch can be a huge advantage for businesses in remote regions – making online lenders a very good option for them.

CONS

Rates vary

The flexibility of non-bank lenders with rates can cut both ways, and means they can vary a great deal. Meaning it’s always wise to jump online and compare your options.

No physical branches (or at least less)

Sometimes it can seem a lot easier to go into a branch and sort a problem out by speaking with someone directly. While credit unions do have some branches, they’re generally nowhere near as common as bank branches. And online lenders generally don’t have any branches whatsoever.

Some can be confusing

If your financial or technical knowledge is fairly basic, this can put many fintech option out of reach. Even online lenders can require a certain amount of technical and internet knowledge – although in that case the process is generally quite simple once you are on the net.

Frequently asked questions about non-bank business loans

Are non-bank business lenders regulated the same way as banks?

Although non-bank lenders don’t need a banking licence to operate, they’re still required to follow the same commercial lending laws and regulations that traditional banks are.

What types of business loan you can get from a non-bank lender?

Non-bank lenders generally offer the same types of loan as banks do, and even a few options they don’t – such as instant loans (a very fast form of personal finance for small amounts up to $5000). There are generally a few lending options offered by a bank that non-banks don’t tend to handle, but they’re generally options for high level business – such as a Commercial Bill of Exchange, which can start at around $500,000.

Is there any chance a small non-bank lender could go out of business?

Just like with any business, there is a small chance that a smaller lender could hit financial problems and be declared bankrupt – especially with some unusual disaster like a global financial crisis. The odds of this are very low however, and if it did your loan would likely be unaffected – the business would probably just be managed by someone else as you continued to repay your loan.

Are my odds of business loan approval better with a non-bank commercial lender?

They can be. Online lenders, in particular, have a reputation for being very lenient with loan approval. That’s something banks certainly don’t have.

Is the security risk greater when using a non-bank lender?

No. Most modern lenders – bank or not – do most of their transactions electronically (using highly secure digital technology) and their websites use encryption for loan applications and other transactions. 

Is it possible to get a business loan through a non-bank lender if I'm currently outside Australia?

One of the advantages of an online lender is the ability to operate remotely, so you can generally do your transactions from anywhere in the world. Many Fintechs aren’t based in Australia at all. It is possible, however, that some lenders may block a transaction and check in with you about it if you make any big transactions from another country – just to check no-one’s doing anything illegal with your account.

Are there any other types of non-bank business finance to consider?

Yes – depending on what you need your funds for, there may be more suitable options for you than a standard business loan. For example, if you need help with purchasing your inventory, you might look to floorplan finance, which allows a lender to help you cover your supply orders and have you repay them once you’re able to sell your stock. For property investors looking to purchase a rent roll on top of property itself, you can look to rent roll finance to help you do so. These are just two examples of many other types of business finance.