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How to determine your business financing options

Compare and choose financing options to find the right source of funding for your business.

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Whether you’re starting a new business or looking for ways to help your existing business grow, having sufficient capital to fund your plans is essential. However, with such an extensive array of business financing options to choose from, selecting the right one for your business can be a confusing and complicated task.

Let’s take a closer look at the business loan and funding options available to you, and how you can determine the best type of financing for your business.

Businesswoman and man discussing business financing options

Five questions to determine your business's financing needs

To decide whether your business needs financing, it's a good idea to ask the following questions:

  1. Is my business doing well? Although it sounds counterintuitive, it's generally a bad idea to look into financing - especially loans - if your business is struggling. Not only will you not qualify for many financing options, but you also risk getting caught up in a cycle of debt if you can't repay any finance you do take out.
  2. Are some seasons more profitable than others? Among the few times financing could be a good option for a struggling business, is when it suffers seasonal losses. Having access to extra funds can keep you afloat in the off-season until sales pick up and you're able repay more easily.
  3. Do I need to build my credit? Consider taking out a small loan you're certain you can repay. By building up your business's credit score. Building up your credit score will ensure that you're likely to get better rates on future loans.
  4. Am I ready to expand? Business financing can be that extra push to making your business more profitable in the long run. But, make sure your business is ready for that kind of growth first.
  5. Can I afford to buy all the equipment I need to run my business? If a lack of equipment is holding you back, it might be worth looking into business equipment financing.

Moula Business Loan

Moula Business Loan

  • Borrow up to $250,000
  • Flexible lending criteria
  • No hidden fees
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100% confidential application

Moula Business Loan

An unsecured business loan with online application and no upfront or early repayment fees.

  • Interest rate type: Fixed
  • Loan security: Unsecured
  • Upfront fee: 2% Establishment fee
  • Minimum loan amount: $5,000
  • Maximum loan amount: $250,000
  • Maximum loan term: 2 years
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Business financing options

Data updated regularly
Name Product Min. Loan Amount Max. Loan Amount Loan Term Upfront Fee Filter Values
Moula Business Loan
1 to 2 years
2% Establishment fee
A loan of up to $250,000 that can be approved and funded within 24 hours. Available to businesses with 6+ months operating history and $5,000+ monthly sales.
Zip Business
6 months to 3 years
No Establishment fee
Borrow up to $500,000 with loan terms of up to 3 years. Flexible weekly, fortnightly and monthly repayment options available with no early repayment fees.
Lumi Unsecured Business Loan
3 months to 3 years
2.5% establishment fee
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.
ebroker Business Loan
1 month to 30 years
$0 application fee
Small business loans available between $5,000 and $5,000,000. Get access to 70+ non-bank lenders on this independent platform.
Max Funding Unsecured Business Loan
1 month to 1 year
$0 application fee
An unsecured business loan from $3,000 that offers convenient pre-approval and no early repayment fees.
Valiant Finance Business Loan Broker
3 months to 5 years
$0 application fee
A Business Lending Specialist from Valiant Finance can give you access to competitive business loans from over 70 lenders. Loans between $5,000 and $1 million are available. Request a call – your loan can be funded in 1 business day.
Octet Trade Finance
1 month to 2 years
Transaction fee 2.5%
Access a line of credit to pay suppliers in over 65 countries. Borrow from $200,000 up to $7 million.
OnDeck Business Loans
6 months to 2 years
3% of loan amount
Apply for up to $250,000 and receive your approved funds in one business day. Minimum annual turnover of $100,000 and 1 year of trading history required.
Heritage Bank Fully Drawn Business Loan
No maximum amount
1 to 25 years
Application fee is available upon application
Get access to a loan from $20,000 with no maximum limit with Heritage Bank. Loans can be secured by residential and non-residential property and have terms of up to 25 years.
Prospa Business Loan
3 months to 3 years
3% origination fee
Small business loans are available from $5,000 - $300,000 on terms of up to 3 years. At least six months trading history and a monthly turnover from $6,000 is necessary.
ANZ Secured Business Loan
Up to 15 years
Benefit from a low rate when you secure this loan with property and/or business assets. Loans from $10,000 available.
ANZ Unsecured Business Loan
Up to 15 years
Apply for a loan from $10,000 with no security required and benefit from flexible repayment terms.
Westpac Business Loan
1 to 30 years
$0 application fee
Purchase a new vehicle, equipment or support your cash flow with a business finance solution from Westpac.
Heritage Bank Business Line of Credit
Up to 25 years
The application fee amount is available upon request
Get access to a credit limit from $50,000 to $500,000 on terms of up to 25-years.

Compare up to 4 providers

What business finance options are there?

Business finance options can be split up into three main categories:

  • Debt finance

    This is the type of finance most people associate with business funding. With debt finance, you borrow money from a lender (ie, you take on a level of debt) and then pay it back over a predetermined period. Loans are available from banks, non-bank lenders and online lenders, with secured and unsecured loans available to suit an extensive range of purposes. On the downside, you’ll need to put your business profits towards paying off the debt.

  • Equity finance

    Rather than borrowing money from a lender, equity finance sees your business acquire funds from angel investors, venture capitalists or from listing your company on the stock exchange via a public float. You can even source the necessary funds from family and friends who are willing to put their money where their mouth is to support your business idea. The advantages of equity finance are that you may be able to raise a substantial amount of money without taking on any debt. However, finding suitable investors can be a time-consuming process and you may need to give up some control of the business.

  • Internal funds

    The final finance option is to use your cash flow and business profits to provide the capital you need. While this means you don’t have to worry about taking on debt and repaying any borrowed money, it can affect your cash flow and lead to financial difficulty if your business experiences a downturn.

How do I determine what type of finance my business needs?

To work out which type of finance is the right fit for your business, consider the following questions:

  • Why does your business need the loan?

    Are you looking to start a new business from scratch, upgrade your equipment, overcome a cashflow shortage or solve one of a myriad other business challenges? For example, if you’re looking to invest in new business equipment, you’ll want to consider your equipment finance options.

  • What stage is your business at?

    Your business’s stage in its lifetime has a big impact on its financial requirements and therefore on the type of finance you should choose. Our guides to business borrowing can help you understand your business needs and finance options, regardless of whether you’re a startup, early-stage business, going through a period of high growth, running an established business, reinvigorating a stagnant business or looking to turn around a business in decline.

  • What’s the state of your business finances?

    The current financial performance of your business will not only affect the type of funding you need, but also your ability to qualify for different types of loans. Your credit history will also affect the range of financing options you are able to access.

  • What industry is your business in?

    The industry you’re in also affects your funding needs and finance options. It goes without saying that a retail store will have different financing requirements to a microbrewery, which will in turn have different needs to a beauty salon.

Once you’ve answered these questions you’ll have a better idea of which type of finance is right for you. Then it’s time to start comparing the different loans and sources of funding available.

What types of business debt loans are there?

The table below features a rundown of all the business debt finance options available to help you grow your business:

Loan type

Loan amount



Business term loan
$5,000 to $500,000
  • Allows you to borrow a single sum and pay it back over a predetermined term
  • Wide range of loans available
  • Fixed- and variable-rate options
  • Can fund major purchases
  • Terms of 15 years or more available
  • Need to make regular repayments, which may be difficult if your business experiences cash flow fluctuations
  • You will often have to offer an asset as security
  • Borrowing a large amount increases your exposure to risk
Business line of credit
$10,000 to $1,000,000
  • Access funds whenever you need them
  • Great for overcoming cash flow shortages
  • You only need to pay interest on the money you spend
  • Because you usually borrow less than you would with a term loan, there is less risk for your business
  • Terms can be fixed or ongoing
  • Interest charges and fees apply
  • Not a long-term financing solution
Business overdraft
$10,000 to $100,000,000
  • Easy and convenient
  • Allows you to overdraw on your business bank account (up to a predetermined limit)
  • Secured or unsecured options available
  • Flexible repayments
  • Can use the funds however you like
  • Higher fees than other loan options
  • Need to have an existing business bank account
  • Your current bank account may not have favourable overdraft terms
Business credit card
Depends on card limit
  • Access to funds whenever you need them
  • Monthly repayments to reduce your debt
  • Handy for managing day-to-day expenses of running a business
  • Many cards allow you to earn frequent flyer or reward points
  • Higher interest rates than other funding options
  • Interest charges can quickly add up
  • Good credit history required
  • Annual fee applies
  • Need to monitor spending to stay within card limit
Equipment finance
Cost of business equipment you need to purchase
  • Provides the funds you need to purchase essential business equipment
  • Equipment is used as security for the loan
  • Several financing options available
  • Fixed and variable rates and flexible payment options available
  • Potentially tax deductible
  • Wide range of finance options can be overwhelming
  • Fees apply
Invoice financing
80% of the invoice amount
  • Useful option for business that offer extended payment terms to customers
  • No interest charges to worry about
  • Don't need to provide an asset as security
  • No stress of ongoing repayments
  • Fees and charges apply
  • Less control over the funds
  • Can cause problems if customers don't pay

Compare invoice financing products

Data updated regularly
Name Product Min. Loan Amount Max. Loan Amount Loan Term Upfront Fee Filter Values
Timelio Invoice Finance
Up to 4 months
Get up to 100% of the value of your invoices without having to wait for customer payments, and with no minimum turnover or operating history required.
ScotPac Invoice Finance
From 1 year
No set amount
Improve your business cash flow by financing your outstanding invoices. No minimum trading history required, but minimum 12 - month term and $10,000 in invoices.
ScotPac Selective Invoice Finance
1 to 3 months
Finance your unpaid invoices on demand with terms of 1 - 3 months. 95% of invoice is paid upfront, with no minimum trading history required.
Octet Invoice Finance
1 month to 2 years
No Set Amount
Convert up to 85% of your company's receivables into cash flow. The value of your receivables need to be worth at least $250,000 to be eligible.

Compare up to 4 providers

What types of business equity sources are there?

If you think equity finance is the way to go for your business, consider the funding sources outlined in the table below:

Funding source

How it works



Angel investors
Groups or individuals provide funding to businesses in the hope of enjoying substantial capital gains on their investment in the future
  • Can provide you with expertise and access to important contacts
  • Can potentially provide a large amount of funding
  • You don’t have to worry about interest charges or repaying the money invested in your business
  • Great for businesses experiencing high growth
  • Worth considering for businesses that are too small to raise money through a public float
  • Only tend to invest in specific industries
  • Can be difficult to find suitable investors
  • You may need to give up some control of your business
  • You may have conflicts with investors
  • Investors may place restrictions on how you can use their funds
Venture capitalists
Venture capitalists invest in startup or early-stage businesses, providing funds to help your business grow in return for equity in the business
  • Can access large amounts
  • Can also help you increase your network of contacts and access specialist business expertise
  • No need to worry about taking on debt or managing repayments
  • Worth considering for businesses that are too small to raise money through a public float
  • You may lose control over business decisions
  • Can be difficult to find funding
Public float
Raise capital by listing your business on the Australian Securities Exchange (ASX) so investors can purchase shares
  • No need to take on debt
  • No need to worry about interest charges and loan repayments
  • Can potentially access significant capital to develop and grow your business
  • Going public can be a complicated and expensive process
  • Requires increased transparency
  • You’re answerable to shareholders
  • Your business may be vulnerable to market fluctuations
Family and friends
Your loved ones and friends provide funds to help you grow your business
  • You deal with people you know
  • Funds could be in the form of a loan or an investment in your business
  • Friends and family can support you to realise your vision
  • Financial issues between family and friends are always at risk of getting messy and complicated
  • Friends and family may have their own ideas about how the business should be run
Investors pledge money to support your business through online crowdfunding platforms. In return they get perks and rewards, or in some cases equity in your company
  • Allows businesses to access funding outside traditional channels
  • Access thousands of potential investors
  • Investors come to you rather than you searching for them
  • Legislation still catching up with this relatively new form of financing
  • You’ll need to share business ideas and plans in a public forum
  • If investors receive a stake in your business, they can have their say on how your business is run

Using internal funds to finance growth

The final business finance option is to finance the future development of your business from your own profits. Of course, this approach also has its own benefits and drawbacks:


  • You don’t take on any debt. Borrowing money always comes with a level of risk attached; using your own money removes that risk.
  • No repayments. When you use internal funds to grow your business, there is no need to worry about the effect of ongoing interest charges and whether or not you will be able to afford your regular repayments.
  • You stay in full control of your business. With no investors or shareholders to keep happy and no lender to repay, you can retain full control of your pride and joy.


  • May not be enough money available. Your profits may not provide sufficient capital to fund your growth or expansion plans.
  • Can cause problems if you experience a downturn. If cash flow dries up and your business experiences a difficult patch, having money in the bank can be crucial to see you through until times improve.

Business financing is a complicated area and there are myriad options available. Consider the needs of your business carefully before choosing any one option, and if possible seek expert advice from your accountant.

Frequently asked questions

What loans are available for struggling businesses?

In general, take caution before taking on debt if your business isn't doing well. If you decide that you need outside funding, you might want to consider a crowdfunding campaign to raise money from your social network and fans. Or look for an investor, if you're certain you can convince them you're able to turn things around.

Can I get a small business loan with poor personal credit?

You might be able to get a small business loan with poor personal credit, because business loan rates don't always rely on your personal credit score as much as personal loans do.

But it's still a factor. To get lower rates, consider applying for your business loan with a cosigner with higher credit or look for a secured loan.

Can I start a new business with a loan?

It can be hard to find a loan for startups. And for good reason: Most businesses fail within their first few years, which could leave you with a lot of debt and the loss of any collateral. Most lenders are wary of businesses that haven't yet proved their might for at least six months.

What do I need to know before I apply?

Four numbers that are important to know before you apply are your current ratio, debt to service ratio, operating income and credit score. That's in addition to things like your financial projections and overall business plan.

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