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Non-bank lender business loans

Some non-bank business lenders can let you borrow more than the big banks and have lower interest rates.

Name Product Min. Loan Amount Max. Loan Amount Loan Term Upfront Fee Filter Values
Lumi Unsecured Business Loan
$5,000
$300,000
3 months to 3 years
2.5% establishment fee
Apply for up to $300,000 from Lumi and benefit from short loan terms, no early repayment fees and once approved receive your funds in just one business day.
Valiant Finance Business Loan Broker
$5,000
$20,000,000
3 months to 7 years
$0 application fee
A Business Lending Specialist from Valiant Finance can give you access to competitive business loans from over 80 lenders. Loans between $5,000 and $20 million are available. Request a call – your loan can be funded in 1 business day.
ebroker Business Loan
$5,000
$5,000,000
1 month to 30 years
$0 application fee
Small business loans available between $5,000 and $5,000,000. Get access to 70+ non-bank lenders on this independent platform.
ScotPac Boost Business Loan
$10,000
$500,000
3 months to 3 years
$0 application fee
A business loan for any industry. Borrow between $10,000 and $500,000, with approved loans funded within 24 hours. Minimum monthly turnover of $10,000 and 1 year of trading history required.
Max Funding Unsecured Business Loan
$3,000
$30,000
1 month to 1 year
$0 application fee
An unsecured business loan from $3,000 that offers convenient pre-approval and no early repayment fees.
Prospa Business Loan
$5,000
$500,000
3 months to 3 years
3.5% origination fee
Small business loans are available from $5,000 - $500,000 on terms of up to 3 years. At least six months trading history and a monthly turnover from $5,000 is necessary.
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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 do however still have to conform to the same regulations, so they're no less safe to borrow from. Non-bank lenders 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. It's better for your business to consider all of the options available, especially if these options can provide you with more competitive rates, fees, loan conditions and customer service.

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 business loan. Individuals with bad credit history can qualify for this loan, although interest rates will likely be higher. Bad credit loans may also require asset security.

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 may 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 standard 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 centralisation 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.

Compare non-bank business credit card options

Name Product Bonus points Complimentary travel insurance Annual fee Interest-free period
American Express Platinum Business Card
350,000
Yes
$1,750
Up to 55 days on purchases
Special Offer: 350,000 Membership Rewards Bonus Points for new American Express Card members. To qualify, you must apply by 25 June 2024, get approved, and spend $12,000 on eligible purchases within 3 months of approval.

Available to ABN holders w/ $75,000 revenue. Features no pre-set spending limit with up to 55 days to pay for your purchases and a Flexible Payment Option. Plus, rewards, insurance covers and up to 99 additional cards for no annual fee.
American Express Velocity Business Card
200,000
Yes
$249
Up to 51 days on purchases
Special Offer: New American Express customers who apply by 15 May 2024 can earn 200,000 bonus Velocity Points if they spend $5,000 within 2 months of approval.

Available to ABN holders w/ $75,000 revenue. Features no pre-set spending limit with up to 51 days to pay for your purchases and a Flexible Payment Option. Plus, Velocity Points, travel insurance covers and Virgin Australia lounge passes.
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4 Responses

    Default Gravatar
    AMBMay 3, 2019

    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.

      AvatarFinder
      JeniMay 5, 2019Finder

      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. 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

    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?

      AvatarFinder
      JoshuaAugust 27, 2018Finder

      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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