Best business loans from non-bank lenders 2026

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 are not authorised deposit-taking institutions, so they sit outside the prudential supervision the Australian Prudential Regulation Authority (APRA) applies to banks. They are regulated by the Australian Securities and Investments Commission (ASIC) and are typically members of the Australian Financial Complaints Authority (AFCA) for dispute resolution. 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?

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

• Can I use a non-bank business loan to pay an ATO tax debt?

  Yes, many non-bank lenders explicitly allow their funds to be used for clearing Australian Taxation Office (ATO) obligations. This is a common strategy for businesses looking to manage cash flow while avoiding the higher penalties or recovery actions associated with unpaid tax debts.

• Are non-bank lenders regulated the same way as big Australian banks?

  No, non-bank lenders are not Authorised Deposit-taking Institutions (ADIs) and therefore fall outside the supervision of the Australian Prudential Regulation Authority (APRA). Instead, they are primarily regulated by the Australian Securities and Investments Commission (ASIC) and are typically members of the Australian Financial Complaints Authority (AFCA) to provide dispute resolution for customers.

• Can I get a non-bank business loan if I have been trading for less than six months?

  Yes, but your options will be limited. Most non-bank lenders, including Prospa, need at least 6 months of trading history, and some, like ScotPac Boost, need 12 months. There are exceptions, though. For example, ScotPac Invoice Finance has no minimum trading history, but you'll need at least $200,000 in invoices. If your business is brand new, it's also worth comparing [startup business loans].

• Do non-bank lenders charge early repayment fees?

  No, many leading non-bank lenders do not charge specific 'early exit' fees, though the interest structure can vary. While providers like Prospa may offer a discount for early payout, others might require you to pay a portion of the remaining interest, so it is vital to check if your quote includes a 'no early repayment penalty' clause.

• Will a non-bank business loan application affect my credit score?

  It can. Most non-bank lenders use a 'soft' credit check for the initial quote, which does not impact your credit file. A 'hard' enquiry is typically recorded when you formally accept a loan offer or proceed to the final stage of a full application, and applying to several lenders in a short space of time can lower your score.

• Why are the interest rates for non-bank loans generally higher than bank loans?

  Rates are typically higher because non-bank lenders accept higher risk profiles and provide much faster access to capital. Unlike traditional banks, non-banks do not have access to low-cost customer deposits and must source their own funding from wholesale markets, which increases their cost of doing business.

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Written by

Elizabeth Barry

Journalist

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Elizabeth Barry is an experienced journalist with over 10 years of expertise in personal finance, contributing to outlets like the ABC, Sydney Morning Herald, and 7News. She holds a Master of Arts in Creative Writing and a Bachelor of Arts in Communication from the University of Technology Sydney, and has earned multiple award nominations, including a Highly Commended recognition at the 2017 Lizzies. Elizabeth began her career at Finder in 2013, progressing through roles to become Lead Editor, where she oversaw a wide range of personal finance coverage until 2024. See full bio

Elizabeth's expertise

Elizabeth has written 151 Finder guides across topics including:

• Banking
• Personal finance
• Investing

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Bria Horne

Writer

Bria Horne was a writer for Finder, with a specialist knowledge of personal loans, car loans and business loans. Originally from the UK, Bria has been a professional personal finance writer in Australia for over 2 years. She has an M.A and B.A in Philosophy and Literature from the University of Sussex, and previously worked on the UK’s leading hospitality publication. See full bio