Interest-free business loans
Give your business the boost it deserves—interest-free and no strings attached.
The NSW government is offering an interest-free business loan that allows small- to medium-sized enterprises to benefit from funds that are usually only available to secure businesses needing more capital. As long as your business can demonstrate the amount of revenue and further growth that are prerequisites for a government loan, you are able to apply for this extra capital.
This opportunity is a real boost to newer businesses because they tend to have an unsecured lending history and are often unable to obtain commercial financing. This initiative is put forward by the NSW government, which means only businesses within NSW are eligible.
Key takeaways
- Interest-free business loans are usually short-term and may have fees or conditions, so check the full cost.
- They're often offered through government grants, non-profits, or lender promotions.
- Ensure you can repay before the interest-free period ends to avoid high-interest charges.
How does an interest-free business loan work?
An interest-free business loan works the same way as any other business loan. Before you apply for the amount your business needs, figure out whether the loan terms and repayments are something your business can take on. The loan offered by the NSW government has a loan term of four years with varying repayment plans and includes the flexibility of multiple payment advances, which can offer peace of mind.
The loan doesn't require any personal assets to be secured, such as a residential property or a vehicle, but while you're paying off your loan, Jobs for NSW will place security over all general and future assets of the business.
What types of interest-free business loans are available?
The Regional Growth Loan is an interest-free loan that specifically assists businesses creating jobs in regional areas outside Sydney, Newcastle and Wollongong. There is no interest payable on this loan. The minimum amount is $200,000 and the maximum is $500,000. This loan does not need to be secured by personal assets. The loan term for is four years. There are no establishment fees or early repayment penalties charged with this loan.
Alternative business loans from NSW government
If your business is not eligible for the Regional Growth Loan, the NSW government also offers two alternative loan options to consider which are charged interest:
- The Strategic Growth Loan is flexible and offers direct capital to emerging and fast-growing businesses that are scaling quickly. This loan offers a minimum of $500,000 and a maximum of $1,200,000. This is offered over four years with an interest rate of 9.2%.
- The Accelerating Growth Loan is also flexible and for businesses that are growing within the state of NSW. The minimum for this loan is $200,000 and it has a maximum of $500,000. The interest rate for this loan is a fixed 9.2% for the term of the loan, which is four years.
There are no establishment fees with these loans, nor are there any penalties for early repayment.
Is my business eligible for an interest-free business loan?
The eligibility criteria for the Strategic Growth Loan are:
- Have an Australian Business Number (ABN) and be an incorporated company
- Have a minimum of five employees (full-time, part-time or casual)
- Create a minimum of 20 new jobs within the next 3 years in NSW
- Demonstrate a likely revenue of at least $1 million within the next year
- Be trading for at least a year
- Demonstrate further growth for a minimum of one year, shown through future pipelines or contracts
- Be unable to obtain commercial finance
The eligibility criteria for the Accelerating Growth Loan are:
- Have an ABN and be an incorporated company
- Have a minimum of five employees (full-time, part-time or casual)
- Create a minimum of 10 new jobs within the next 2 years in metropolitan NSW (Sydney, Newcastle and Wollongong)
- Demonstrate a likely revenue of at least $500,000 within the next year
- Be trading for at least a year
- Demonstrate further growth for a minimum of one year, shown through future pipelines or contracts
- Be unable to obtain commercial finance
The eligibility criteria for a Regional Growth Loan are:
- Have an ABN and be an incorporated company
- Have a minimum of five employees (full-time, part-time or casual)
- Create a minimum of 10 new jobs within the next 2 years outside of metropolitan NSW (Sydney, Newcastle and Wollongong)
- Demonstrate a likely revenue of at least $500,000 within the next year
- Be trading for at least a year
- Demonstrate further growth for a minimum of one year, shown through future pipelines or contracts
- Demonstrate they have been unable to obtain commercial finance
What do I need to consider before applying?
Once you've read the eligibility criteria, it's important to consider whether or not your business is going to grow and meet the standards that are set by the NSW government. Once you've considered this, it's also important to consider the hiring capabilities of your business, because some of the loan requirements are that you have to add 10 or 20 employees over the next 3 years.
As there are no fees for early repayments or any establishment fees, another thing to consider is the penalties that might be associated with this loan, such as if you make a late payment.
Frequently asked questions
Compare other business loans now
1 - 6 of 92
Compare other products
We currently don't have that product, but here are others to consider:
How we picked these
More resources on Finder
Ask a question
More guides on Finder
-
Great Southern Bank Business+ Vehicle Loan
Borrow up to $250,000 to buy your business a new or second-hand vehicle up to 5 years old from a dealership.
-
Business loans for Centrelink recipients
Centrelink might block your business idea from taking off, but a variety of finance options including government schemes can help your business succeed.
-
Business car loans
If you're after a business car, compare your vehicle finance and car loan options and get your business on the road.
-
Westpac Invoice Finance
Access up to 85% of your unpaid invoices from $500,000 upwards in less than 24 hours with Westpac Invoice Finance.
-
Heritage Bank Fully Drawn Business Loan
Heritage Bank's Fully Drawn Business Loan is a flexible business finance offering with both fixed and variable rate options, a high maximum loan term and no limit on borrowing power.
-
No Deposit Business Loans
With just a little bit of ingenuity, you can apply for a 100% commercial loan and access business finance without a deposit.
-
Westpac Secured Business Loan
Find out about Westpac's business offerings including secured and unsecured business loans, overdrafts and credit cards.
-
Can sole traders get a loan?
What you need to know if you’re applying for a business loan as a sole trader.
-
Bad credit business loans
We’ve written about how you can get a business loan even with bad credit.
-
Business loan calculator
Looking to apply for a business loan? This business loan calculator lets you compare the cost of two business loans so you can see which is the one to apply for.