Business loans are lending products designed to help business owners fund business operations, purchase stock, pay staff, manage cash flow or 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.
Business loan interest rates vary widely. Secured, low-interest loans to well-qualified borrowers sit at the bottom of the range, while unsecured loans to higher-risk borrowers sit at the top. Compare the current rates in the table above to see where the market sits today.
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.
Things that will affect how your business loan works are:
Choosing the right business loan depends on your business and what you're trying to achieve.
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 choose a variable or fixed interest rate. These loans are useful when you're trying to cover large expenses.
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.
For many Australian SMEs, accessing a low-interest business loan requires providing collateral such as commercial or residential property. These secured lending options represent some of the most competitive market rates available. By reducing the risk for the lender, business owners can often secure more favourable terms and longer repayment periods. This is a common strategy for established businesses looking to refinance existing high-interest debt or fund significant capital acquisitions without the heavy burden of high monthly interest costs.
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.
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.
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.
Loans to cover the purchase of business equipment, such as computers, tools, coffee machines, or kitchen fit-outs. You can rent, lease or buy outright.
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.
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 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.
Startups and very small businesses might find it harder to get a business loan because they likely have fewer assets, less consistent cash flow or, in a startup's case, no established track record of business activity.
There are business loans that cater to start ups, but in general lenders only lend to startups who have been running for at least 6-12 months and meet certain revenue figures and financial criteria.
Because new, unproven businesses are riskier customers these loans will have higher interest rates.
There are also business groups like Tech Ready Women who offer funding for startups and expansion.
Government-backed loan programs and grants can serve as strategic alternatives to traditional high-interest debt for startups and expanding small businesses. State-based innovation grants and federal government programs can offer capital with more flexible terms or lower interest costs than many private commercial lenders, and you can check what your business is eligible for using the grants and programs finder on business.gov.au. These initiatives are designed to encourage growth in specific sectors such as technology, manufacturing or regional development without requiring the immediate security of property.
Small businesses will find it easier to get a business loan approved if:
Even when you've decided which type of business loan your business needs, there are still other things to consider before landing on the right loan for you.
Business loan interest rates will vary depending on your lender, your loan type, and your own (and your business's) financial position. You can choose between a variable rate or a fixed rate. Lenders can move their variable rates in line with the cash rate and you have more flexibility to make extra repayments. The RBA raised the cash rate to 4.85% on 3 November 2026, its fifth increase this year, so check whether your lender has passed it on to variable business loans. Fixed rates stay the same for the life of the loan, but you generally can't make extra repayments.
When seeking a low-interest business loan, the structure of the rate is as important as the number itself. A fixed low-interest rate provides SMEs with repayment certainty and protection against future rate rises (budgeting is easier when costs are known). Conversely, a variable low-interest rate may start lower and offers more flexibility, such as the ability to make unlimited extra repayments or use an offset account to reduce interest charges. Small business owners should weigh the security of a fixed rate against the potential savings and flexibility of a variable option based on their projected cash flow.
Factor in the cost of loan fees along with the interest payments to know the true cost of the loan.
The most common business loan fees include:
If you have a commercial or residential property to offer as security you can get a loan with a lower interest rate.
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.
Ask yourself what your business needs the loan for, how established your business is and what the business financial situation is. Your business profile and situation will have an impact on what loan you choose or are approved for.
For example, if you need to cover multiple small expenses over a short time, you might look at an overdraft, line of credit or business credit card.
"When lenders assess your business loan application they will consider your business purpose, your historical business finances and your financial projections. They'll also consider the business credit score as well as your personal credit score and financial situation.
Because of this it's really important to do all the calculations and collate all the information to put the best application forward.
It's also a good idea to speak to your accountant or finance broker for help and support."
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.
Consider a business credit card
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We analyse more than 120 business loans across multiple providers, for their interest rates, fees and features, assigning them a score out of 10. The higher the score, the more competitive the product.
The Finder Score methodology is designed by our insights and editorial team. We review products objectively. Commercial partnerships do not affect the scores.
A business term loan of up to $1,000,000. No security needed and flexible loan terms available.
A variable rate business overdraft account to help you manage your cashflow. Borrow up to $1,000,000.
If you're after a business car, compare your vehicle finance and car loan options and get your business on the road.
Looking to purchase new equipment for your business? Find out how you could benefit from a vehicle and equipment loan from St.George. Compare and apply today.
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Benefit from flexible loan terms and loan amounts through over 80 lenders from Valiant Finance.
We’ve covered a wide range of loans you can apply for if you’re a small business in need of finance.
Are you looking for a business loan but don't have an asset to offer as security? You still have loan options available. Find out what you need to know about unsecured business loans and how to compare them.
Banjo Loans offers convenient small business financing of up to $2,000,000 and you'll receive your loan within 24-48 hours upon approval.
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.
I am planning to start a new business with my mates – 4 partner in total. Its an online shopping website. Our total start up cost will be $15k AUD approx. We are looking for an loan amount of 10K. Is that amount too low for a business loan?
Does business loan providers provide business insurance as well.
Hi Dheeraj,
Business loans can range from much lower than $10,000, it does vary depending on each lender. For instance, Max Finance on the page above has a minimum loan amount starting from $1,000.
You may compare business loans available to Australian businesses to help you choose the suitable loan for your company.
Some lenders may offer business insurance with the loan however it is usually separate. Have a look at our comparison of business insurance and get instant quotes online or connect with one of our expert brokers.
Please make sure to read the eligibility criteria, features and details of the loan and policy, as well as the relevant Product Disclosure Statement before making a decision and consider whether the product is right for you.
Thanks,
Elizabeth
Hi I applied for a business loan and all documents were submitted last Wednesday. Just wondering how long it takes to get a answer weather it was approved or not?
Hi Mark,
This depends on the lender you applied with. If you’re referring to Max Funding (above) your loan should be processed within about 24 hours. You may want to get in contact with Max Finding directly to find out the status of your application.
I hope this has helped.
Thanks,
Elizabeth
This site will not compare business loans. Please advise if this does not do this or what do i need to do? Thanks
Hi Terry,
Thanks for your comment. Whilst we make every attempt to help you compare a range or business loans, it’s important to also do your own comparisons.
The table above is a guide and you should always do you due diligence before applying for any form of credit.
I hope this helps.
Cheers
Matt
i am taxi driver looking for loan to buy a taxi plate 375k but not have any security or residentioal property . do you recommend some one or any bank .
Hi Sam,
Thanks for your question.
There are a couple of lenders that offer taxi loans that can help you finance taxi plates. We don’t currently compare taxi loans specifically, but after a quick search for ‘taxi loans’ I found several providers offering these types of loans. I’m unable to recommend a specific provider to you, but as I mentioned searching for ‘taxi loans’ using a search engine such as Google might be a good place to start.
I hope this has helped.
Thanks,
Elizabeth
I am looking at buying a small/ cafe business for myself and my wife we are both in the hospitality industry..
. We have around $85.000 dollar mark in the bank… We don’t have any other assets.. We are looking at borrowing another $50.000 with additional $5000.00 over draft account..We have an accountant that is doing a business plain for us to go to the bank.. He has the financial paper work for the business we are looking at buying.. Can u suggest any other details that we can put together so we can increase our chances for a successful application
Hi Dario,
Thanks for your question.
This page is probably our most comprehensive guide on obtaining a business loan. Lenders will like to see as much information as possible about your business and its profitability.
It’s probably best to speak to any potential lenders beforehand as well to determine what kind of documentation they would like to see.
Cheers,
Shirley