Non-bank business 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 business 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.
Valiant Finance works with a large panel of lenders that can help you find a loan for your business.
Access to 60+ lenders
Dedicated credit specialists
Various loan options available
*The products compared on this page are chosen from a range of offers available to us and are not representative of all the products available in the market. There is no perfect order or perfect ranking system for the products we list on our Site, so we provide you with the functionality to self-select, re-order and compare products. The initial display order is influenced by a range of factors including conversion rates, product costs and commercial arrangements, so please don't interpret the listing order as an endorsement or recommendation from us. We're happy to provide you with the tools you need to make better decisions, but we'd like you to make your own decisions and compare and assess products based on your own preferences, circumstances and needs.
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 3-12 months.
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 business loan. 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 business 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.
Non-bank business loan providers we compare
Prospa
Moula
Spotcap
Ondeck
FAQs
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.
Elizabeth Barry is Finder's global fintech editor. She has written about finance for over five years and has been featured in a range of publications and media including Seven News, the ABC, Mamamia, Dynamic Business and Financy. Elizabeth has a Bachelor of Communications and a Master of Creative Writing from the University of Technology Sydney. In 2017, she received the Highly Commended award for Best New Journalist at The Lizzies. Elizabeth has found writing about innovations in financial services to be her passion (which has surprised no one more than herself).
Finder has just announced Australia’s best financial products and innovations awarding products and services across a range of industries including banking, insurance, property, technology and travel.
I have researched a business idea for 2 years which is new to Australia, done research, ran figures and would like to start. I need to lease land, buy equipment and build one hall. I have found a great property in good location to lease, but how do I go about the financing. $$400,000 would give me enough to pay wages for the first year as well as covering the start up costs. I just don’t know how to go about financing. I have no assets in my name. I researched grants, but for those my business needs to be running for about 9 months before I can apply.
Many lenders have strict requirements regarding the amount of time a business needs to have been operating. However, people looking to start a new business can also access funding without the need to offer security. You may find out more about startup loans in our guide here. I suggest that you speak to your chosen lender regarding your loan application as they can provide options that would suit your business needs most.
I have a startup/early stage online and offline clothing business with patented phone pocket invention that is developed in all respects except sales, which will soon grow through online and offline marketing. Trading for more than 9 months. How can I please get a working capital business loan of $50K-$100K in spite of current very low turnover?
Thanks for getting in touch with finder. I hope all is well with you. :)
It is true that having a very low turnover would decrease your chance of getting approved for a business loan. However, you may still want to check the non-bank business loan providers on this page. They are less strict compared to traditional banks that follow a meticulous application process.
Moreover, decreasing your business loan may also increase your chance of getting approved. $50K-$100K is a big amount considering that you have low turnover. Moreover, you can use properties that can serve as securities to convince lenders to give you the money.
Ultimately, it is the lenders who will assess your application. You might also ask the lender, given with your situation, your other possible options.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
How likely would you be to recommend finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
Important information about this website
finder.com.au is one of Australia's leading comparison websites. We compare from a wide set of major banks, insurers and product issuers.
finder.com.au has access to track details from the product issuers listed on our sites. Although we provide information on the products offered by a wide range of issuers, we don't cover every available product. You should consider whether the products featured on our site are appropriate for your needs and seek independent advice if you have any questions.
Products marked as 'Promoted' or "Advertisement" are prominently displayed either as a result of a commercial advertising arrangement or to highlight a particular product, provider or feature. Finder may receive remuneration from the Provider if you click on the related link, purchase or enquire about the product. Finder's decision to show a 'promoted' product is neither a recommendation that the product is appropriate for you nor an indication that the product is the best in its category. We encourage you to use the tools and information we provide to compare your options and find the best option for you.
The identification of a group of products, as 'Top' or 'Best' is a reflection of user preferences based on current website data. On a regular basis, analytics drive the creation of a list of popular products. Where these products are grouped, they appear in no particular order.
Where our site links to particular products or displays 'Go to site' buttons, we may receive a commission, referral fee or payment.
We try to take an open and transparent approach and provide a broad based comparison service. However, you should be aware that while we are an independently owned service, our comparison service does not include all providers or all products available in the market.
Some product issuers may provide products or offer services through multiple brands, associated companies or different labelling arrangements. This can make it difficult for consumers to compare alternatives or identify the companies behind the products. However, we aim to provide information to enable consumers to understand these issues.
Providing or obtaining an estimated insurance quote through us does not guarantee you can get the insurance. Acceptance by insurance companies is based on things like occupation, health and lifestyle. By providing you with the ability to apply for a credit card or loan we are not guaranteeing that your application will be approved. Your application for credit products is subject to the Provider's terms and conditions as well as their application and lending criteria.
Please read our website terms of use for more information about our services and our approach to privacy.
I have researched a business idea for 2 years which is new to Australia, done research, ran figures and would like to start. I need to lease land, buy equipment and build one hall. I have found a great property in good location to lease, but how do I go about the financing. $$400,000 would give me enough to pay wages for the first year as well as covering the start up costs. I just don’t know how to go about financing. I have no assets in my name. I researched grants, but for those my business needs to be running for about 9 months before I can apply.
Hi AMB,
Thank you for getting in touch with Finder.
Many lenders have strict requirements regarding the amount of time a business needs to have been operating. However, people looking to start a new business can also access funding without the need to offer security. You may find out more about startup loans in our guide here. I suggest that you speak to your chosen lender regarding your loan application as they can provide options that would suit your business needs most.
I hope this helps.
Thank you and have a wonderful day!
Cheers,
Jeni
I have a startup/early stage online and offline clothing business with patented phone pocket invention that is developed in all respects except sales, which will soon grow through online and offline marketing. Trading for more than 9 months. How can I please get a working capital business loan of $50K-$100K in spite of current very low turnover?
Hi Peter,
Thanks for getting in touch with finder. I hope all is well with you. :)
It is true that having a very low turnover would decrease your chance of getting approved for a business loan. However, you may still want to check the non-bank business loan providers on this page. They are less strict compared to traditional banks that follow a meticulous application process.
Moreover, decreasing your business loan may also increase your chance of getting approved. $50K-$100K is a big amount considering that you have low turnover. Moreover, you can use properties that can serve as securities to convince lenders to give you the money.
Ultimately, it is the lenders who will assess your application. You might also ask the lender, given with your situation, your other possible options.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua