non-bank-business-loans

Best non-bank business loans

Looking for better rates and loan conditions? Get increased flexibility, quicker decisions and better customer service with non-bank lenders.

Non-bank lenders often provide businesses with added flexibility as they’re privately-owned institutions that aren’t subject to the confinements of a banking licence. They also get their funding from numerous sources that offer better flexibility and options, making non-bank business loans increasingly preferable among Australian businesses.

If you’re thinking about looking for financing, don’t limit your options to regular banks. Your business deserves to know all the options available, especially if these options can provide you with better rates, fees, loan conditions and customer service.

Prospa Business Loan Offer

Prospa Business Loan

  • Borrow up to $250,000
  • Same-day turnaround
  • Repay early without penalty
Security Logo

100% confidential application

Prospa Business Loan Offer

The Prospa Business Loan allows you to borrow up to $250,000 for your business needs. The loan is available for new or existing business needs and features no upfront fee and no fees for early repayment.

  • Interest rate type: Variable
  • Application fee: $250 establishment fee
  • Minimum loan amount: $5,000
  • Maximum loan amount: $250,000
Go to site

Compare a range of non-bank business loans

Rates last updated November 24th, 2017
Name Product Min Loan Amount Max. Loan Amount Loan Term Application Fee Product Description
Prospa Business Loan
$5,000
$250,000
0.25 to 2 years
$250 establishment fee
Special offer: No repayments required until Monday 8 January 2018 for business loans that are settled between 20 November 2017 and 31 December 2017. Conditions apply.
NAB QuickBiz Loan
$5,000
$100,000
1 to 3 years
$0
An unsecured business loan from $5,000 that can be processed in 1 business day.
Spotcap Loans
$10,000
$250,000
1 year
$0
Take advantage of a fixed interest rate and no upfront fees on this business loan, available up to $250,000. Note: Business must have been operating for at least 18 months and have turnover over $200,000.
Moula Business Loan
$5,000
$250,000
0.5 to 1 years
$0
Small business loans of up to $250,000 approved and funded within 24 hours. Transparent fees and rates. Note: Business must have been operating for at least 12 months and have monthly sales of at least $5,000.
GetCapital Flexible Business Loan
$5,000
$500,000
0.25 to 1 years
1.5% to 2.5% initial draw down fee
A flexible business loan that allows you to earn Qantas rewards points. Note: Business must have been operating for at least 9 months and have monthly sales of at least $10,000.
Sail Unsecured Business Loan
$5,000
$100,000
1 year
2.5% origination fee
Take advantage of a convenient business loan available from $5,000. Bad credit applicants considered. Note: Business must have been operating for at least 6 months and have turnover over $50,000.
RateSetter Business Loan
$10,000
$150,000
0.5 to 5 years
0.5%
Apply for up to $150,000 and choose between a secured or unsecured loan. Note: Business must have been operating for at least 2 years and have turnover over $250,000.
businessloans.com.au  Flexible Business Loan
$5,000
$500,000
0.5 to 1 years
1.5% Initial draw down fee
A 100% online business loan with amounts available from $5,000. Flexible eligibility criteria and transparent rates and fees.

Compare up to 4 providers

What types of non-bank business loans are available?

  • Line of credit. This is a revolving loan, such as a credit card or overdraft, that allows you to withdraw funds up to a maximum limit. As you pay back the loan, you regain access to your funds.
  • Short-term loan. This is an up-front lump-sum loan with a fixed repayment schedule ranging from 3 to 12 months.
  • Unsecured loan. This type of loan doesn’t require you to attach assets as security for your lender. It could be a term loan with a fixed repayment schedule or a line of credit.
  • Secured loan. This type of loan requires you to attach assets, such as home or business equity, as security for your lender. It could be a term loan or a line of credit.
  • Bad credit loan. This offers individuals with bad credit history can qualify for this loan, although interest rates will likely be higher.

How to find the best non-bank business loan

There is no one “best” business loan on the market, as it will depend on your particular situation. However, keep the following in mind when weighing up your options:

  • Can my business afford it? As the most important factor in your decision making, be well aware of all loan costs as well as your repayment ability over the next few months.
  • What’s the interest rate? Make sure you know the difference between fixed and variable interest rates and how they can impact your business. Also be cautious of variable interest rates that exceed your repayment ability.
  • What’s the comparison rate? This combines the loan’s interest rate, fees and other charges into one single percentage to help you better compare your options.
  • What are the fees? Be aware of one-off fees such as application fees, exit fees and termination fees. Other charges include ongoing fees such as service and advance fees.
  • How will I repay the loan? Lines of credit don’t have fixed repayment terms, but lump-sum term loans do and will usually cost you the loan amount plus interest over the loan's term. Also keep in mind that lenders are usually more flexible with repayments for business loans than personal loans, so check your lender’s repayment terms before applying.
  • Secured or unsecured? The difference between a secured and unsecured loan is huge, with one requiring you to put up assets as collateral for the lender while the other has no such requirement (usually meaning higher rates). The right choice depends on your particular situation.

Have you weighed up the pros and cons of borrowing from non-bank lenders?

  • Flexible rates. Non-bank lenders are privately-owned institutions, which enables them to be flexible with rates and fees.
  • Customer service. Non-bank lenders usually have better customer service than regular banks. This includes better service, better communication and quicker decision-making.
  • Fewer loan conditions. Generally, non-bank lenders have fewer loan conditions than larger banks, which is a result of the lack of centralization with decision making. Also, a large portion of non-banks don’t require real estate as security, which is a huge advantage for Australian businesses.
  • Inconsistent rates. Rate flexibility is a double-edged sword, which may mean rate volatility. Since non-bank lenders have several sources of funding, they may or may not pass rate cuts on to consumers.
  • Vulnerability. Non-bank lenders are vulnerable in times of economic downturn due to their dependance on a steady economy and their difficulty accessing capital during these times.

What pitfalls do you need to avoid?

You should always be cautious of debt. Avoid borrowing too much money and learn exactly how much debt your business can handle. Also, try not to apply for amounts that exceed your business needs. Understand all the fees involved, including one-off and ongoing fees, and be aware of interest rates that exceed the market rates as well as your ability to repay.

You should also be cautious of applying too many times for credit products. Applying and getting rejected for loans will negatively affect your credit history and your ability to be accepted for future loans. Take your time weighing up your options and apply only when you meet all eligibility requirements set out by your lenders.

Frequently asked questions

What’s the main difference between regular banks and non-bank lenders?

Non-bank lenders are privately-owned institutions that don’t hold a banking licence. They get funding from various sources, at wholesale, and then sell at retail value. This allows them more flexibility with rates and fees than normal banks.

What happens if my non-bank lender goes bankrupt?

If this happens, you won’t be forced to suddenly repay your entire balance, but you’ll still be obligated to continue making payments normally. Also, your original loan terms won’t change, even with changed ownership.

Are non-bank lenders regulated?

Although non-bank lenders don’t hold a banking licence, they’re bound by the same laws and regulations as regular banks.

Picture: Shutterstock

Was this content helpful to you? No  Yes

Related Posts

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, read the PDS or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms and Conditions and Privacy Policy.
Ask a question