Do you need a business loan or a personal loan?

There is a range of financing options available for businesses. Find out if your business is more suited to a business loan or personal loan.

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There are many reasons why a company may choose to take out a loan. A sudden spike in sales might have created a need for some additional cash flow, or maybe that influx has created the need to expand. While a tailored business loan would seem to be the obvious choice, many smaller companies still side with a personal loan, believing in its security and simplicity. Here we consider the pros and cons of both.

Which is easier to set up, a business loan or a personal loan?

  • Business loan. Most banks want to see detailed projections, business plans and assurances that your company will be in a position to make repayments for the whole loan period. However, many online business lenders require fewer details to approve a business loan. You’ll find these lenders may approve you after simply seeing your business’s accounting information or financials as well as your own personal information.
  • Personal loan. The fate of your application for a personal loan will be predominantly decided by your credit position and your own personal financial situation. You’ll also need proof of income, and as you are self-employed you will likely need the last two years of tax returns.

Loan options you can apply with

Data updated regularly
Name Product Min. Loan Amount Max. Loan Amount Loan Term Upfront Fee Filter Values
Moula Business Loan
$5,000
$250,000
1 to 2 years
2% Establishment fee
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.
Valiant Finance Business Loan Broker
$5,000
$1,000,000
3 months to 5 years
$0 application fee
A Business Lending Specialist from Valiant Finance can give you access to competitive business loans from over 70 lenders. Loans between $5,000 and $1 million are available. Request a call – your loan can be funded in 1 business day.
Max Funding Unsecured Business Loan
$2,000
$30,000
1 month to 1 year
$0 application fee
An unsecured business loan from $2,000 that offers convenient pre-approval and no early repayment fees.
OnDeck Business Loans
$10,000
$250,000
6 months to 2 years
3% of loan amount
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.
Prospa Business Loan
$5,000
$300,000
3 months to 3 years
3% origination fee
Small business loans are available from $5,000 - $300,000 on terms of up to 3 years. At least twelve months trading history and a monthly turnover from $6,000 is necessary.
ANZ Secured Business Loan
$10,000
$10,000,000
Up to 15 years
$600
Benefit from a low rate when you secure this loan with property and/or business assets. Loans from $10,000 available.
Westpac Business Loan
$5,000
$1,000,000
1 to 30 years
$0 application fee
Purchase a new vehicle, equipment or support your cash flow with a business finance solution from Westpac.
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Data updated regularly
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Name Product Interest Rate (p.a.) Comparison Rate (p.a.) Min Loan Amount Loan Term Application Fee Monthly Service Fee Monthly Repayment
Harmoney Unsecured Personal Loan

From 6.99% (fixed)
7.79%
$2,000
3 to 5 years
$575 ($275 for loans of below $5,000)
$0
You'll receive a fixed rate between 6.99% p.a. and 24.79% p.a. based on your risk profile.
Apply for a loan up to $50,000 and repay your loan over 3 or 5 years terms.
Plenti Fixed Rate Personal Loan

From 6.39% (fixed)
6.39%
$2,001
3 to 7 years
From $0 to $999
$0
You'll receive a fixed rate between 6.39% p.a. and 17.89% p.a. based on your risk profile
A flexible loan with amounts from $2,001 and terms starting from 3 years. Interest and comparison rates calculated for a loan term of 5 years.
Symple Loans Personal Loan

From 5.75% (variable)
6.47%
$5,000
1 to 7 years
from 0% to 5% of the loan amount
$10
You'll receive a personalised interest rate from 5.75% p.a. to 25.99% p.a. based on your risk profile
Borrow up to $50,000 to pay for what you need.
SocietyOne Unsecured Personal Loan (2-3 years)

From 6.99% (fixed)
6.99%
$5,000
2 to 3 years
from 0% to 5% of the loan amount
$0
You'll receive a fixed rate between 6.99% p.a. and 17.49% p.a. based on your risk profile
A loan from $5,000 to use for a range of purposes. Benefit from no ongoing fees and no early repayment fee.
SocietyOne Unsecured Personal Loan (5 years)

From 7.99% (fixed)
7.99%
$5,000
5 years
from 0% to 5% of the loan amount
$0
You'll receive a fixed rate between 7.99% p.a. and 19.99% p.a. based on your risk profile
A loan from $5,000 to use for a range of purposes. Benefit from no ongoing fees and no early repayment fee.
Alex Personal Loan

From 6.95% (fixed)
7.37%
$2,100
6 months to 5 years
$295
$0
You'll receive a fixed interest rate from 6.95% p.a. to 19.99% p.a. based on your risk profile
Borrow between $2,100 and $30,000 from 6 months to 5 years. Benefit from no ongoing fees.
Wisr Personal Loan

From 6.49% (fixed)
6.49%
$5,000
3 to 5 years
Waived $595 Establishment Fee
$0
You'll receive a fixed rate between 6.49% p.a. and 19.95% p.a. based on your risk profile
A loan from $5,000 that charges no fees for extra or early repayments. Keep in mind security is required in some cases.

⭐Finder Exclusive: Establishment fee is waived for all applications submitted before 28 February 2021. Limited to the first 200 settled loans.
OurMoneyMarket Personal Loan

From 6.75% (fixed)
6.96%
$2,001
1 to 7 years
1.5–6% of your total loan amount
$0
You'll receive a fixed rate from 6.75% p.a. to 20.99% p.a. based on your risk profile
A personalised loan from $2,001 to $75,000 that varies based on your credit history and financial situation.
CUA Unsecured Fixed Rate Personal Loan
9.39% (fixed)
9.64%
$5,000
1 to 7 years
$175
$0
You'll receive a fixed rate of 9.39% p.a.
An unsecured loan from $5,000 with flexible repayments and no monthly fee.
NAB Personal Loan Unsecured Fixed

From 9.99% (fixed)
10.88%
$5,000
1 to 7 years
$0 (waived)
$10
You'll receive a fixed rate between 9.99% p.a. and 18.99% p.a. ( 10.88% p.a. to 19.83% p.a. comparison rate) based on your risk profile
An unsecured loan up to $55,000 you can use for a range of purposes and pay off over up to 7 years. Note: Majority of customers will get the headline rate of 12.69% p.a. (13.56% p.a. comparison rate) or less. See Comparison rate warning in (i) above. Application fee of $150 waived off for applications submitted by 31 March 2021.
Latitude Personal Loan (Unsecured)

From 7.99% (fixed)
9.24%
$3,000
1 to 7 years
$250 (Loans under $5000 - $140)
$13
You'll receive a fixed rate between 7.99% p.a. and 22.99% p.a. based on your risk profile
Apply for what you need from $3,000 and use it for a range of purposes. Repay weekly, fortnightly or monthly. You can check your interest rate before applying with no impact to your credit score.
NOW Finance No Fee Unsecured Personal Loan

From 5.95% (fixed)
5.95%
$5,000
18 months to 7 years
$0
$0
You'll receive a fixed rate between 5.95% p.a. and 17.95% p.a. based on your risk profile
Borrow from $5,000 to $7,999 with loan terms between 18 months and 3 years or borrow $8,000 to $50,000 with loan terms between 18 months and 7 years.
Pepper Money No Fee Personal Loan

From 6.95% (fixed)
6.95%
$5,000
18 months to 7 years
$0
$0
You'll receive a fixed rate between 6.95% p.a. and 17.95% p.a. based on your risk profile
Borrow from $5,000 to $40,000 and use for a range of purposes. Pay no upfront, early repayment or ongoing fees.
MoneyMe Personal Loans

From 6.25% (fixed)
7.64%
$2,100
1 to 5 years
from $295 to $495
$10
You'll receive an interest rate between 6.25% p.a. and 19.95% p.a. based on your risk profile
A flexible personal loan from MoneyMe with access to cash when you need it.
Plenti Variable Rate Personal Loan

From 6.39% (variable)
6.39%
$2,001
1 to 3 years
From $0 to $999
$0
You'll receive a variable rate from 6.39% p.a and 16.89% p.a. based on your risk profile
A flexible loan with amounts from $2,001 and terms starting from 12 months. Benefit from transparent costs and a rate estimate before you apply.
CUA Unsecured Variable Personal Loan
11.89% (variable)
12.15%
$5,000
1 to 7 years
$175
$0
You'll receive a variable rate of 11.89% p.a.
Borrow from $5,000 with the option for flexible repayments and no monthly fees.
NAB Personal Loan Unsecured Variable Rate

From 9.99% (variable)
10.88%
$5,000
1 to 7 years
$0 (waived)
$10
You'll receive a variable rate between 9.99% p.a. and 18.99% p.a. ( 10.88% p.a. to 19.83% p.a. comparison rate) based on your risk profile
An unsecured loan up to $55,000 you can use for a range of purposes. Benefit from fee-free additional repayments and a redraw facility. Note: Majority of customers will get the headline rate of 12.69% p.a. (13.56% p.a. comparison rate) or less. See Comparison rate warning in (i) above. Application fee of $150 waived off for applications submitted by 31 March 2021.
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Which offers better value for my business?

  • Business loan. For business taxes, there are significant benefits to keeping your personal and business affairs separate. As well as claiming goods and services tax, retail and manufacturing companies, in particular, can benefit from reduced import duties on products purchased using your loan.
  • Personal loan. Ensuring that you are not being overcharged for business expenses that are paid for with a personal loan can be difficult and time-consuming.

What if I have business partners?

If you opt for a business loan, the loan will be held in a joint account with easy access for all partners. With the loan guaranteed by each partner, the risk placed on each individual is greatly reduced. If you decide to apply for a personal loan, lack of joint access to your company’s loan may affect the efficiency of your company, or create issues of responsibility if the business is unable to meet repayments.

However, there is the option of taking out a joint application personal loan. These loans usually have a maximum of two applicants, although some allow up to four.

Do business loans or personal loans offer better flexibility?

Business loans

  • Lenders are likely to enforce strict limits in the first 12 months of your loan, but if you can back up your initial projections you could well be granted an increase in your funding amount.
  • You will need to use the entire loan amount for business purposes.

Personal loans

  • If you want to take out more funds later on, you will have to prove to the bank that your personal loan was in fact used, successfully, to fund a growing business. The administrative processes attached to this can be slow.
  • Funds can be used for business purposes as well as for other personal needs.

Should I opt for a secured or unsecured loan?

  • Business loan. Deciding between a secured or unsecured business loan will often depend largely on the amount of money required. Most banks require security for startup loans, or only offer unsecured line of credit loans. However, there are now a number of online lenders offering unsecured loans. Keep in mind that these unsecured loans can come with higher rates, so if you do you have security to offer you may want to compare what secured options you have available.
  • Personal loan. There are a variety of assets you can secure a personal loan to. However, if the business fails it will have a huge impact on your home and professional life should you default on the loan.

Is there anything else to consider?

Before you apply for a loan, there are a number of other factors worth thinking about.

  • Sole trader or partnership? There are clear reasons why a business loan would most likely be better suited to a company run by partners. However, a sole trader may appreciate the control they have over a personal loan, which will likely involve a smaller sum of money.
  • The length of the loan. For a shorter period, the lower rates of a personal loan might hold more appeal. However, over an extended period, for example, 10 years, this advantage might be overshadowed by the ease of use offered by a business loan.
  • The age of the company. One of the most common issues with a business loan is getting access to it in the first place. Startup companies will need to decide whether the difficulty of accessing the type of finance they’ve chosen will be worth it in the long-term.

Need additional cash flow?

If a sudden spike in sales has resulted in outstanding invoices, invoice financing could be an option to manage the cash flow. This type of business loan comes with reduced risk, no asset requirements or interest payments.

Data updated regularly
Name Product Min. Loan Amount Max. Loan Amount Loan Term Upfront Fee Filter Values
Timelio Invoice Finance
$10,000
$100,000,000
Up to 4 months
$0
Get up to 100% of the value of your invoices without having to wait for customer payments, and with no minimum turnover or operating history required.
ScotPac Invoice Finance
$10,000
$150,000,000
From 1 year
No set amount
Improve your business cash flow by financing your outstanding invoices. No minimum trading history required, but minimum 12 - month term and $10,000 in invoices.
ScotPac Selective Invoice Finance
$10,000
$1,000,000
1 to 3 months
$500
Finance your unpaid invoices on demand with terms of 1 - 3 months. 95% of invoice is paid upfront, with no minimum trading history required.
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