Unsecured Business Loans

Find the best loan deal for your business by comparing a range of options right here with Savvy.

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, updated on September 21st, 2023       

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The features and benefits of unsecured business loans

Get approved for up to $500,000

You can apply for a loan big or small, with amounts starting as low as $5,000 and ranging all the way up to $500,000, making them useful for a vast array of purposes.

Take up to five years to repay

You can also take advantage of the ability to space out your instalments, with terms as short as three months and as long as five years available so you can tailor repayments to your business’ needs.

Access your funds in as little as two hours

Crucially, your business’ funds can be made available on the same day, with some lenders able to approve your application and fund your loan in just two hours.

Able to be used for any business purpose

These loans are designed to be flexible so operators can use them across any area of their business, meaning you can distribute the funds however you like to cover your expenses.

No early repayment fees

If your business finds itself in a time of increased demand and revenue, you’ll be able to contribute above the minimum required amount and pay off the loan early without any fees with many lenders.

Open to new businesses and startups

Your business doesn’t have to have been up and running for years prior to your application, with many lenders requiring as few as six months of trading to qualify for financing.

Low-fee options

There’s a range of loans and lenders available on the market right now which offer a discount on fees or are willing to waive certain charges, such as ongoing annual costs.

Low doc finance available

If you don’t have all the documents you need to apply for a standard loan, you can still be approved for low doc business finance to help your company reach its goals.

Why compare business loans through Savvy?

Unsecured business loans explained

How do unsecured business loans work?

Unsecured business loans are those which don’t require any form of asset to serve as collateral for the loan. The way they’re structured is no different from any other standard loan: on approval, you’re given a lump sum to use for business purposes, from which point you’ll be required to pay off the debt in even instalments across a pre-determined period with interest until it's completely paid off.

They’re one of the most common types of finance available to small and medium businesses in Australia and there are several reasons why this is the case, which essentially boil down to the fact that they’re easier to obtain. Many businesses don’t have the assets required to secure their loans, such as property or valuable equipment, so they’re available to a wider demographic. Additionally, because of this lack of a security requirement, they’re faster to process and fund, given that lenders won’t need to spend any time assessing the asset’s suitability

What types of unsecured business finance can I choose from?

There are many different options when it comes to business finance in Australia without security, so it’s important to understand your options before diving into the application process. As well as comparing different offers right here with Savvy, any of the following finance types may be suitable for your business in different circumstances:

Standard business loan

As discussed, this is the most common option available to businesses with a basic structure of repaying gradually alongside interest and fees over a set term. Many businesses will consider this the best business finance for their needs.

Business line of credit

Lines of credit are different from loans in several key ways. Rather than handing the business operator a lump sum to manage and start repaying effective immediately, a lender will approve them up to a set limit on their credit line. This allows them to withdraw funds up to that limit whenever they’re needed and only pay interest on the amount used, adding greater flexibility to the process.

Lines are also revolving, meaning that, in many cases, they can stay open as long as they’re viable, saving the trouble of applying for finance whenever you need it. However, interest rates can be higher, meaning it may cost more for you to leave a debt outstanding on your account, and fees can be charged even if you don’t access the line in a given month.

Business overdraft

Overdraft facilities are similar in structure to lines of credit, except they’re attached to business transaction accounts as opposed to coming directly from a lender. This enables business operators to withdraw from their account beyond $0 up to a pre-determined limit. The process of applying and getting approved for this facility is similar to that of a loan or line of credit.

A key element of overdraft facilities is that, unlike lines of credit, they come without set repayment schedules. This means your business can pay off the debt at whatever speed you prefer, with only interest required per pay cycle. Because rates are also quite high for this type of finance, though, you’re better off clearing your debts sooner.

Invoice financing

Invoice finance is an alternative type of funding available to businesses who are seeking payment for outstanding invoices from their clients. There are two main types of invoice finance which are important to consider if you find yourself in this position as an operator:

Invoice factoring involves selling your outstanding invoices to an external organisation, which advances as much as 90% to 95% of their value to you. The remaining amount owed will be passed onto your business once the customer pays their invoice, with service fees deducted from that sum. In this way, invoice factoring isn’t a type of loan.

Invoice discounting is essentially a line of credit taken out and secured by the value of your outstanding invoices, which can enable you to obtain up to 90% of their value immediately. Whilst invoice discounting is a type of secured finance, you won’t need any assets to serve as collateral for the loan.

Types of business loan

Top tips for how to compare business loans

Consider the potential borrowing range

If you’re looking for a large business loan, it’s important to make sure your lender offers it. While some lenders can offer up to $500,000, others may only be able to approve you for a maximum of closer to $250,000. The same applies if you only need a small loan: minimum amounts can vary from $5,000 to $10,000. Our repayment calculator can help you determine the rough costs of different loans.

Think about loan terms

It’s important to enter this process with a clear idea of what your business can comfortably manage to repay. This will help inform your decision, as lenders set varying minimum and maximum loan terms. If you need up to five years to repay your loan, make sure you’re picking out lenders who can meet your needs. Similarly, there’s little use in taking longer than you need on a short-term loan.

Compare interest rates and fees

The related costs which come with your loan are also a clear consideration which should factor into your thinking. Although you can claim the interest charges on tax, costs such as ongoing annual costs and application costs (the latter of which can reach up to 3% of your loan amount) aren’t tax-deductible. Always look to secure the cheapest and most manageable loan for your business.

Study the eligibility criteria

Above all else, though, it’s crucial to ensure your business is actually eligible to be approved for a loan. Different lenders have different requirements when it comes to time in operation (minimums ranging from six to 12 months), revenue generated (from $5,000 per month to $1 million per year) and documents required (such as specific business financial statements).

The business loan application process

Our Process

Compare your options with Savvy

Consider different business loan offers here before you apply to make sure you’re in a position to make an informed choice on the best deal.

Prepare the required documentation

Review your lender’s documentation requirements, which will likely include ABN and GST registration, business bank statements and photo ID.

Submit your application

Once you have all of these completed, you can send off your application via your lender’s online portal and await a prompt response from them.

Sign your agreement and receive your funds

If successful, your lender will send a loan contract for you to sign and return to them, after which the funds can be advanced to your business’ account.

More unsecured business finance questions answered

Can my startup business get approved for financing?

Yes – there are specialist lenders who can cater to the needs of startup businesses seeking out finance who have been in operation for only a few months. This may be required if you haven’t been trading for long enough to qualify for a standard business loan. Loans of this nature typically come with a lower borrowing range and higher interest rates due to their riskier nature.

Are seasonal businesses able to be approved for financing?

Yes – we’re partnered with flexible lenders who can accommodate the revenue generation needs of businesses who operate on a seasonal basis and approve their business loan applications. You’ll be able to speak with your lender to determine what the best repayment schedule may be, which might involve paying down a greater amount during your ‘on’ months if no early repayment fees are charged.

Should I apply for my business loan through a broker?

Going through a business loan broker brings with it a variety of key benefits. If you’re short on time, a broker will be able to do the heavy lifting for you when it comes to comparing and applying for your loan and can access better deals through their existing relationships with lenders than you might’ve been able to access otherwise. They’re also helpful when it comes to more complex financing arrangements like purchasing an existing business. Alternatively, you can simply compare loans yourself with Savvy.

Are there any government grants I can be approved for?

Yes – there are always grants and loans available from federal and state governments which can help eligible businesses out. It’s worth checking out your state government website, as well as that of the Australian Government, to see if there are any programs which your business could qualify for.

Should I use an unsecured loan to purchase business equipment?

You could, but it may not be the best option. By seeking out equipment finance instead, you can open yourself up to greater potential borrowing power and lower interest rates. If you’re looking to finance valuable equipment for your business, you can secure a great deal by applying through Savvy today.

Will I be able to refinance my business loan down the track?

Yes – many businesses may look to refinance their loans for several reasons, such as increasing their loan amount, accessing a lower interest rate or new features or simply updating their loan to take advantage of an increased financial situation. For instance, if your business has built more positive credit behaviour in the opening months of your loan, you may be eligible for a lower rate or fees in some instances.

Can I get approved for a business loan as a sole trader?

Yes – provided you have an active ABN or ACN and meet the rest of your lender's criteria, you'll be able to take out a loan regardless of the size of your sole trader business. Some sole traders may find it more difficult to meet these criteria, as they're assessed on the same points as larger-scale businesses, but there are many specialist lenders in the market who can small business owners.

Is a chattel mortgage the same as a business loan?

No – a chattel mortgage is a type of secured loan which uses an asset (such as a car or equipment) as security for the loan deal. 

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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.