Business loans for Centrelink recipients

Centrelink payments don’t need to stand in your way of receiving a loan. If you have a solid business idea, a proven track record and passion, you can get a business loan.

Key takeaways

  • Centrelink doesn't offer business loans, but you can still apply for regular business loans while on Centrelink.
  • If you're looking to start your own business you can apply for financial support and training through Centrelink via the New Enterprise Incentive Scheme (NEIS).
  • The key to being approved for a business loan is to carefully review the eligibility criteria. You should provide a clear, detailed explanation of how you meet the requirements.
How does it work?What to knowLearn more
MaxFundingBusiness financing up to $1,000,000. Bad credit applicants will be considered.MaxFunding is a very flexible lender, but you'll need to own an asset to be eligible. If you don't own an asset, other criteria will apply.
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BigstoneYou can borrow between $10,000 and $5,000,000Loans are granted and managed online. Once you apply, the loan will be listed on Bigstone's marketplace for up to 14 days. Individual investors can apply to fund you. The interest rate is calculated on your business's risk profile.
ThinCatsYou can borrow between $50,000 and $300,000.You can apply directly through ThinCats, a sponsor or via an introduction. Your application will be assessed by the ThinCats credit team. They will help you prepare an information packet to be presented to investors. A loan auction will be held to fund your loan. Interest rates will be determined during the loan auction.
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Can I apply for a business loan if I am a Centrelink recipient?

If you receive payments from Centrelink, getting a traditional business loan may prove to be difficult. It may also be difficult to find a business loan without an established business history. However, there are business loans you can apply for, such as the following:

  • Non-bank business loans. Non-bank lenders include independent lenders and neobanks. These institutions are smaller than traditional banks. They generally provide cheaper, more competitive loans. Their lending criteria are also more flexible.
  • Peer-to-peer business loans. A peer-to-peer loan is borrowed from an individual investor and not a traditional lender. Applications for these loans are faster, with competitive rates and flexible lending criteria.
  • New Enterprise Incentive Scheme (NEIS). This is a government-funded program for applicants who receive payments from Centrelink. It provides training and income assistance for Centrelink recipients who wish to start and work full-time in their own business.

You can apply for a business loan from non-bank and peer-to-peer lenders. The following non-bank lenders offer business loans even if you don't have an established business. These lenders will consider your application based on the strength of your ideas, experience and personal drive. They provide financing even if you receive Centrelink payments. There are also options if you already have an established business.

You can also apply for a loan with the following peer-to-peer lenders. If you have a rocky financial history or former unsuccessful businesses, you may find it difficult to convince potential investors.

What fees and charges should I expect?

There are two main costs that come with a business loan:

  • Interest rates. This is set as a percentage. It shows how much you will have to repay for the amount you've borrowed. For instance, if you borrow $100 at a 20% interest rate, you'll have to pay back $120.
  • Fees. The fee structure of your loan will depend on your lender. There could be fees for establishing your account, ongoing monthly fees, exit fees if you pay off your loan early and early or late repayment fees if you pay outside the schedule. These are some of the main fees to look out for, but there could be others. These fees add to the cost of your loan, so make sure to include them in your calculations. Leaders are required to make all fees clear and comprehensible.
  • Getting a loan will not be easy. Lenders and investors may be more hesitant to lend to someone on Centrelink. You will also need to be prepared to pay higher rates. You may be able to convince them if you have an outstanding business idea or if you can demonstrate the profitability of your new business.
  • Plan for how you'll spend the money in as much detail as possible. The lender will want to know how the money is being spent and if it's being spent wisely. They will also want to know if they can expect a return on their investment.
  • Set up a calendar around your repayment schedule and work according to it. Keeping up with repayments will help you keep costs down. Missing repayments will result in extra fees and can harm your credit rating.
  • Money may be tighter after you've taken out a business loan. All proceeds of the loan will have to be used for business purposes only. Having to make repayments can make finances tight unless you're sure your business can turn a profit.

There are several uses for a business loan, including the following:

  • Starting your own business
  • Growing your existing business
  • Boosting your cash flow
  • Buying inventory, commercial property, vehicles, machinery, equipment and tools
  • Exporting goods overseas
  • Conducting research and development

Technically, no. Centrelink doesn't give business loans. But some Centrelink recipients can apply for NEIS assistance. NEIS is managed by Centrelink and the Department of Human Services. It is not a business loan, but it can help you get self-employed and start your own business.

What is the New Enterprise Incentive Scheme (NEIS)?

NEIS is a government-funded program. It is designed to help Centrelink recipients start their own businesses.

If you're on Centrelink, NEIS can help you start and work full-time for your own business. It counts as Centrelink-approved activity for up to 13 weeks from commencement.

The business is required to be upstanding, lawful and preferably not-for-profit. There are 6,300 places available each year.

What support can you receive on the NEIS?

  • Accredited small business training
  • Business mentoring and support for up to 52 weeks
  • NEIS allowance for up to 39 weeks
  • NEIS Rental Assistance for up to 26 weeks

Am I eligible for the NEIS program?

If you're interested in NEIS, a good first step is to register for jobactive if you haven't already. You'll have to be registered if you want to get into the program. You can learn more about it here.

The selection criteria for the NEIS are fairly strict. To qualify for the application alone, you must meet the following criteria:

  • Be 18 years of age or older and on an eligible Centrelink scheme. You must be fully eligible for jobactive or disability employment services.
  • Be participating in jobactive as a volunteer and commence in NEIS Assistance before the end of your service period.
  • Not convert to an Age Pension before or during NEIS.
  • Be available to participate in NEIS training and work full-time in the proposed NEIS business.
  • Not currently be going through bankruptcy.
  • Not have received NEIS assistance in the last 3 years or have ever received it for a similar business activity.

Additionally, your business must meet the following criteria:

  • Not be already operating on a commercial basis
  • Be independent when established
  • Be legal, upstanding and capable of withstanding public scrutiny
  • Have been assessed as commercially viable
  • Not be based on the takeover or purchase of an existing business
  • Not directly compete with an established business unless your business will do it differently or if you can prove there's unsatisfied demand in the area.
  • Be operated and located entirely within Australia
  • Be structured so you'll always have a controlling interest over it.
  • Not be a for-profit organisation, unless approved by the Department of Employment.

Whether you're eligible for a business loan will depend on the provider. For many business loans, your business needs to be established for a certain amount of time. There are also requirements around monthly or annual turnover. Your chances of getting a business loan increase in the following situations:

  • Your business has been continually operating for a long time.
  • Your business has demonstrated earning capability.
  • You and your business are currently debt-free and have a strong credit history.

To apply for a business loan, you will need to do the following:

💵 Work out how much you need to borrow and what you can afford.

🔎 Look for lenders. Check their eligibility criteria to ensure you can apply.

🖨️ Organise and prepare the required documentation. This can include the following:

  • Proof of identification, such as a driver's licence or passport
  • Your business's ABN/ACN
  • Your personal and/or business financials
  • Your business plan
  • Financial forecasts

📱 Apply.

How long lenders take to respond will vary between lenders and their processing times. Some lenders may allow you to repay your loan early without penalties.

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Elizabeth Barry was the lead editor for Finder. She has over 10 years' experience writing about a range of topics with a focus on personal finance. You’ll find her writing and commentary in a range of publications and media including Seven News, the ABC, MSN, the Irish Times and Singapore Business Review. See full bio

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24 Responses

    Default Gravatar
    JulietteNovember 14, 2024

    I am 60 yrs. I quit my job to access super to recover from debt. I have not been able to find employment again. I’m no longer receiving Centrelink except i do have a low income health card and a good opal card. I’m artistic with qual’s. My council has a vendor list but I must have an ABN. Might I be eligible for NEIS?

    Default Gravatar
    ChristopherAugust 21, 2024

    Hi I have never quite had a full time employment I’m currently on centrelink payments and wish to work for myself I was wondering could I get assistance in either starting my own lawn mowing business or a jims mowing franchise

      AvatarFinder
      AngusSeptember 23, 2024Finder

      Hi Christopher, The providers listed on this guide may be able to assist, and you could also try using the NEIS. Good luck!

    Default Gravatar
    TeresaAugust 16, 2023

    I’m looking for advice to start a new cleaning business and does Centrelink help with new business loans and help start up new business, I am on jobseekers payments.

      AvatarFinder
      RichardSeptember 1, 2023Finder

      Hi Teresa,

      You can sometimes get a loan while on Centrelink payments, if you have another form of income. But you might struggle to get a business loan if you don’t currently have a business. Lenders often require you to already be in business for at least 12 months before they’ll lend to you.

    Default Gravatar
    briannaFebruary 11, 2023

    hi, can I use the neis loan to buy an already existing business?

      AvatarFinder
      SarahApril 6, 2023Finder

      Hi Brianna,

      According to NEIS, to be eligible for a loan, the business must be:

      – Not operating on a commercial basis, or
      – Is an existing micro-business affected by COVID-19.

      They don’t specify the definition of a micro business, so it might be worth contacting the NEIS National Customer Service Line on 1800 805 260.

      Hope this helps!

    Default Gravatar
    KylieMay 12, 2018

    Hi
    Im about to open a cafe in a rural area of Australia
    Popelation here is 22,000
    The town is about to expan here due to a new developments by goverment and a steelworks inverstor.

    The food here is not the best
    Due to my own medical condition I would like to offer a healthier choice of foods in my cafe.
    I am on a dsp payment but subjected to change as soon as Im open for business due to centrelinks policy
    Im currently a volunteer jobseeker.
    Is there any start up loans I may be eligible as I need to hire staff at a minimum wage I will be needing to pay them $548.70 wage + $52.18 superannuation uniform.
    Then my other expenses power water rent set up cafe dinning and kitchen.
    Is there any help or loans i could be eligible please?

      AvatarFinder
      JoshuaMay 13, 2018Finder

      Hi Kylie,

      Thanks for getting in touch with finder. I hope all is well for you. :)

      Being on a Centrelink means you might have a limited option when it comes to business loans. Nevertheless, as long as you can demonstrate the viability of your business idea plus be able to meet your lender’s requirements, then you should be able to obtain a business loan.

      On this page, you will find on our table one of your options. You may give it a try, directly get in touch with them by clicking on the “Go to site” green button.

      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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