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Compare business loans in Australia
A business loan can cover you during slow periods or help propel you into growth. Whatever your need, compare your options to find the right interest rates and features for your business needs.
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.
Borrow up to $500,000 and receive the funds within 24 hours of approval. Loans under $200,000 do not require security. Use this loan for your business needs, like business expansion or purchasing equipment.
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How do business loans work in Australia?
You can get a business loan from most Australian banks or from online business lenders.
The amount you can borrow, your interest rate and whether you need security all depend on your lender's requirements and your business's size, needs and financial position.
Security. Secured loans have lower interest rates but require an asset as security. Some lenders accept a business asset, but it's possible to use a commercial or even residential property as security.
Eligibility. Many lenders require your business to have been operating for 1 to 2 years, with financial records for that time. Lenders examine cash flow projections, business activity statements and conduct credit checks on company directors.
Loan type. Some business loans provide you with a single lump sum, which you pay off over time like any loan. But there are business overdrafts that let you spend beyond what's in your bank account to cover shortfalls, or lines of credit that let you spend money flexibly.
Interest rate. You can get business loans with fixed or variable interest rates from most lenders. Secured business loans have the most competitive rates.
Which type of business loan is best for my business?
Choosing the right business loan depends on your business and what you're trying to achieve.
Business term loans
The most straightforward business loan, where you apply for a loan and receive the funds in a lump sum. You can get secured and unsecured business loans for flexible amounts, and can receive a variable or fixed interest . These loans are useful when you're trying to cover large expenses.
Example: Samantha needs a variable rate business loan
Samantha runs a catering business. She needs to borrow $60,000 to cover a kitchen expansion. Samantha needs a single lump sum. But she also wants the ability to repay the loan quickly. She expects her revenue to increase as a result of the expansion and wants to clear the debt sooner.
She opts for a business loan with a variable interest rate, as variable rates tend to come with no early repayment fees.
Business line of credit
A business line of credit gives you a pool of money that you can withdraw and pay off whenever you want. Once you're approved for a line of credit you can spend money flexibly, up to the credit limit amount. You only pay interest on the money you withdraw, not the overall limit you're approved for.
This is useful for businesses that have to cover multiple smaller expenses over time or have seasonal spikes and dips in revenue.
Example: Glen needs a line of credit
Glen runs a landscaping business with 5 employees. He's approaching a quiet few months for the business and wants to have money on hand to cover a few expenses he has been putting off.
On top of paying his employees, he wants to renovate his office and upgrade his equipment. He takes out a line of credit, and is able to get a quote for his upgrades and withdraw that exact amount each time.
When his cash runs low during this quiet season, he also withdraws money in order to meet payroll. When business picks up, he pays off his withdrawals and is able to reuse that credit the next year.
Business vehicle finance
Loans to cover the purchase of business vehicles including cars and trucks. These come with a range of options, such as leasing the vehicles or buying the vehicles outright. They can be used to buy individual vehicles or an entire fleet.
Invoice financing lets you use outstanding invoices, which represent future payments, to get cash when you need it now. A cut of the outstanding invoice is paid to the lender in return for the upfront funds.
Business overdraft
If you have a business bank account you can get an approved overdraft limit to borrow beyond what's in the account. This is useful to cover brief cash flow shortfalls that are not predictable enough to require a line of credit.
Business credit cards
Business credit cards let you cover business expenses now and pay them off over time. Useful for sole traders, small businesses, or to fund the business needs of trusted staff.
How to find the right loan for your business
To help find the right business loan, ask yourself these questions:
Why does your business need the loan? Are you looking to start a new business from scratch, upgrade your equipment or overcome a cash flow shortage?
What's the state of your business finances? The current financial performance of your business affects the type of funding you need, but also your ability to qualify for different types of loans. The stronger your performance, the easier it is to get a loan.
What timeframe do you need the funds for? If you have to cover multiple small expenses in a short time, you might look at an overdraft, line of credit or a business credit card. Covering major renovations would require a large loan with a longer loan term.
Loans for small businesses and startups
It's easier for larger, established businesses to get finance in Australia. But startups and very small businesses might find it harder because they likely have fewer assets, less consistent cash flow or, in a startup's case, no established track record of business activity.
In general, lenders will only lend to startups who have been in business for at least 6-12 months and meet certain revenue figures.
Note that many business loans are risk-based. This means interest rates are set depending on the financial position of you and your business. New, unproven businesses are obviously riskier customers. This means higher interest rates.
Small business loans
Small businesses will find it easier to get a business loan approved if:
You have a good personal credit score.
You have a clear plan for how to use the funds.
Your business has been operating for several years and has detailed financial records.
You can secure the loan against commercial or personal property.
Business loan interest rates
Business loan interest rates vary depending on your lender, your loan type, and your own (and your business's) financial position.
Variable rate business loans. These rates can change at any time at the lender's discretion. Lenders move variable interest rates in response to changing market conditions and the cost of securing funds.
Fixed rate business loans. With a fixed rate business loan your interest rate won't change during the fixed period. After that, your rate reverts to a variable one. Fixed interest rates make it easier for businesses to manage loan expenses. Most lenders won't let you make extra repayments on a fixed rate.
Common business loan fees
Before signing a business loan contract you should look at all the loan fees. Factor in the cost of loan fees along with the interest payments.
The most common business loan fees include:
Establishment fee. Many lenders charge a one-off, upfront establishment or origination fee. This fee is often a percentage of the loan amount. A 3% establishment fee on a $300,000 business loan would cost you $9,000.
Monthly or annual account keeping fees. Some lenders charge a smaller ongoing fee to maintain the loan account.
Late fee. If you miss a loan repayment your lender may charge you a fee.
Extra repayment fee. Some loans, typically fixed rate loans, don't let you make extra repayments to the loan or charge a fee for doing so.
How can I save money on a business loan?
Compare interest rates. Don't just apply for the first business loan that suits your needs. Compare rates from multiple lenders.
Factor in fees. Fees can really affect the cost of your loan, so add these into your cost calculations.
Offer security. If you have a commercial or residential property to offer as security you can get a loan with a lower interest rate.
Choose the right loan term. Longer loan terms suit larger loan amounts. Longer terms also mean smaller monthly repayments but more interest charged over time. Shorter terms increase your monthly repayments but you pay less interest.
Look for a flexible loan. If you can repay a loan early you can save money. Flexible business loans let you redraw extra repayments in an emergency.
Contact a business loan broker. A business loan broker can help you find a suitable loan. They can help you understand the true cost of a loan.
How do credit scores and business loans work?
Lenders assess individual borrowers along with the business itself. For larger businesses, a lender will check a company director's credit report.
Having a good credit history is even more important for sole traders and small business owners. There are also credit scores specifically for businesses.
You can improve both personal and business credit scores by establishing a good track record of repaying debts on time, not missing bills or loan repayments and avoiding applying for too many credit products at once.
How do I apply for a business loan?
Work out what type of business loan you need.
Compare loans and rates from multiple lenders.
Prepare all your personal and business financial records and documents.
Complete the application.
Wait for the funds to reach your account.
Online business lenders can approve applications quickly. A traditional bank may take longer and you have to speak to a lending specialist from the bank first.
Documents you need for a business loan application
A valid ABN or ACN for your business.
Annual financial statements that include a balance sheet and income statement
Recent individual tax returns, an ATO notice of assessment and other details.
Credit reports for you and your business (the lender will check this).
Information about the property or asset you're offering as security.
Our business loan engine is completely free to use. There are no costs at all for you to use our database to find a better deal. Better still, we regularly run exclusive deals that you won't find on any other site.
We're experts
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We are independently owned and have a mission to help Australians make better financial decisions. That means our opinions are our own and you can compare nearly every business loan in Australia on the site (and find a better deal).
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Since 2015, we've helped 50,000+ people find a business loan by explaining the options simply. You don't need to give us any details to use our tables. We're here to help you make a decision.
Frequently asked questions about business loans
Business loans are lending products designed to help business owners fund business operations, purchase stock, pay staff, manage cash flow and expand. The right business loan can keep your business afloat when you're dealing with seasonal cash flow or just short on cash. It could also help you seize on an opportunity and grow your business to new heights.
Unlike a personal loan, a business loan must be specifically for business or investment purposes. To get a loan approved the lender considers the performance and history of your business, plus your own credit history.
You can get a business loan that's as small as $5,000. Some lenders will lend as much as $250,000 or even $500,000.
For larger businesses loan amounts are much higher and can run into the millions of dollars.
Yes, in many cases a lender checks a business owner or company director's credit score. Your credit history is especially important if you don't have a long, established business history or assets to support your application.
Many banks only offer business loans to borrowers who have a business account with the bank. If you're looking for a smaller loan for a new business, even having an existing personal account with a bank can make business loan approval easier.
But it's always a good idea to compare your options before making a big financial decision.
If you apply for multiple loans, the lender will make an enquiry on your credit report each time. Even for a business loan. These enquiries are recorded on your credit report and can lower your score.
Avoid applying for multiple credit products at once. Find one loan and apply. If you get rejected, work out why and fix any issues before applying again.
Debt finance means making regular repayments on money you've borrowed, with fees and interest charges. These loans are useful for long-running businesses but harder to get for startups.
Equity finance is much more flexible and you don't have to make regular repayments. But equity finance involves bringing in outside investors. You might have to give up part ownership of your company and share your future profits with the investors.
Elizabeth Barry is 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.
You’re actually already on the correct page where you can compare your options for business loans. They also cater to small businesses. Please click on the name of your preferred loan to see more details, then you can click on the ‘Go to Site’ button to submit an online application.
I would also suggest you use our business loan calculator. You can make use of the business calculator and get more information.
The amount you can borrow would depend on the assessment of the lender of your income, assets, credit history, etc. You can discuss your loan options with a lender featured above. Be sure to review the criteria and requirements before you apply.
I’m an international student. I want to open a fancy clothing store here in perth.
what i really wanted to ask is, can i get loan? and what should i have to do for that? please help me through this.
We have a page that talks about temporary resident loan, but I’m unaware of any lenders that can offer business financing if you’re on a student visa. However, you may be eligible for a personal loan. If you’re looking to purchase property or already own a property, you may be eligible for a secured loan with a bank. You can find out some more information on our guide about loans for non-residents.
seeking an unsecured (start up) business loan of $60,000.00 over 6 years. The proposed business is the same type of business I have been establishing in shopping centers since 1984 (experienced) and have never defaulted.
your thoughts?
The only lender we have available for comparison that will allow you to fund a new business venture is Max Funding. You can read our Max Funding review page to learn more.
I’m a new migrant on PR, wanting to buy land to build houses to sell. As I currently do not have a job, could you advise avenues that I can utilize to get loan to purchase the land and loan for construction too. Thanks
The business loan available on this site are outlined on the page above, but the only one available for new businesses is Max Finance. You’ll need to get in contact with them directly regarding your current situation and eligibility.
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A lot of small businesses sell on the basis of sec-52 statement? I want to obtain a business loan on that basis. Please help me.
Hi Gun,
Thanks for your inquiry.
You’re actually already on the correct page where you can compare your options for business loans. They also cater to small businesses. Please click on the name of your preferred loan to see more details, then you can click on the ‘Go to Site’ button to submit an online application.
I would also suggest you use our business loan calculator. You can make use of the business calculator and get more information.
Cheers,
Rench
I want to invest in a business and I want to know how much I can borrow
Hi Joss,
Thanks for your question.
The amount you can borrow would depend on the assessment of the lender of your income, assets, credit history, etc. You can discuss your loan options with a lender featured above. Be sure to review the criteria and requirements before you apply.
Hope this helps.
Cheers,
May
I’m an international student. I want to open a fancy clothing store here in perth.
what i really wanted to ask is, can i get loan? and what should i have to do for that? please help me through this.
Hi Aashim,
We have a page that talks about temporary resident loan, but I’m unaware of any lenders that can offer business financing if you’re on a student visa. However, you may be eligible for a personal loan. If you’re looking to purchase property or already own a property, you may be eligible for a secured loan with a bank. You can find out some more information on our guide about loans for non-residents.
I hope this helps,
Elizabeth
seeking an unsecured (start up) business loan of $60,000.00 over 6 years. The proposed business is the same type of business I have been establishing in shopping centers since 1984 (experienced) and have never defaulted.
your thoughts?
Hi JH,
The only lender we have available for comparison that will allow you to fund a new business venture is Max Funding. You can read our Max Funding review page to learn more.
Hope this helps,
Elizabeth
Hi,
I’m a new migrant on PR, wanting to buy land to build houses to sell. As I currently do not have a job, could you advise avenues that I can utilize to get loan to purchase the land and loan for construction too. Thanks
Hi Sam,
The business loan available on this site are outlined on the page above, but the only one available for new businesses is Max Finance. You’ll need to get in contact with them directly regarding your current situation and eligibility.
Hope this helps,
Elizabeth