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.

Elizabeth Barry

Expert overview: Three things to know about getting a business loan from an alternative lender

  • The number of alternative business lenders has grown considerably in recent years, giving you more choice than ever.
  • These loans are generally unsecured and available for amounts up to $500,000. Terms differ but are usually between three months and five years.
  • To qualify you will need to meet a minimum revenue requirement (set by the lender) and have been operating for a set amount of time.

Lending Express Business Loans Offer

Lending Express Business Loans

  • Your choice of lender
  • Loan terms up to 2 years
  • Personalised service
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100% confidential application

Lending Express Business Loans Offer

Access a range of lenders to find the right business loan for you. Unsecured loans up to $500,000 available.

  • Interest rate type: Variable
  • Application fee: $0
  • Minimum loan amount: $5,000
  • Maximum loan amount: $500,000
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Compare a range of non-bank business loans

Rates last updated November 21st, 2018
Name Product Min Loan Amount Max. Loan Amount Loan Term Application Fee Product Description
Lending Express Business Loans
$5,000
$500,000
0.25 to 2 years
$0
Apply online for up to $500,000 and get access to over 25 lenders through Lending Express.
Valiant Finance Business Loan Broker
$5,000
$1,000,000
0.25 to 5 years
$0
A Small Business Lending Specialist from Valiant Finance can give you access to competitive business loans from over 60 lenders. Loans between $5,000 and $1 million are available. Request a call – your loan can be funded in 1 business day.
Note: If you apply and have your loan settled in November 2018, you will receive $250 cash-back.
Prospa Business Loan
$5,000
$250,000
0.25 to 2 years
$0
A business loan available up to $250,000 that can be funded in 1 business day. Must have a turnover of $6,000+ per month and provide 6 months of trading history, 3 months history for existing business purchases. Note: Businesses taking a loan out will have no repayments until 6th January, 2019
Moula Business Loan
$5,000
$250,000
0.5 to 2 years
$0
A loan of up to $250,000 that can be approved and funded within 24 hours. Available to businesses with 6+ months operating history and $5,000+ monthly sales.
OnDeck Business Loans
$10,000
$250,000
0.5 to 2 years
2.5% origination fee
Apply for up to $250,000 and receive your approved funds in one business day. Minimum annual turnover of $100,000 and 1 year of trading history required.
Spotcap Loans
$10,000
$400,000
0.25 to 2 years
$0
Benefit from a fixed interest rate and no upfront fees with a loan available up to $400,000. Must have been operating for at least 18 months and have turnover over $200,000.

Compare up to 4 providers

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Get access to a wide range of business finance options with Valiant Finance. Fill out this form to speak to an expert.

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

Valiance Finance Lender Logos

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.
  • 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. 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.

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.

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2 Responses

  1. Default Gravatar
    PeterAugust 19, 2018

    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?

    • finder Customer Care
      JoshuaAugust 27, 2018Staff

      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

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