two people in a small business

Five small business loans that don’t need security

How to borrow money without laying down your property as security.

Small business loans help entrepreneurs meet financial obligations. However, lenders often require that you put down property as security for repayments. Not every business owner is in a position to do so.

Fortunately, business owners can apply for loans without putting up their assets as security. Lenders evaluate the strength of your business and will approve an amount based on their assessment. Besides sound business structure, you also need to show bank statements and a reasonably good credit history.

Elizabeth Barry

Expert overview: The three most important things to know about unsecured business finance

  • Unsecured business loans are usually offered by alternative lenders while the majority of banks still require residential or commercial security.
  • You can generally borrow up to $500,000 depending on your business financials and how long you’ve been in operation.
  • Loan options include term loans, lines of credit and equipment finance

Which lenders offer loans without security?

Both banks and alternative lenders offer loan products that don’t require property as security. Rates, fees and loan terms differ depending on the institution, so it’s a good idea to shop around for the best combination of these factors.

Alternative lenders are generally more relaxed with their lending criteria. If you have a negative credit history or serious cash flow problems, these providers may have a more varied portfolio of products suited to your situation.

What loan types are available?

Lenders offer a few different types of business financing that doesn't require security, whether it be in the form of real estate or something else. Consider the following types to see which one might work best for your business:

  • Unsecured business loan

The lender will consider the financial health of your business and whether or not you’re in a position to make repayments. The minimum and maximum amounts vary depending on the lender, but the loan amount depends on the lender’s assessment of your business. Online lenders such as OnDeck can approve same-day deposits of up to $150,000 with loan terms it feels you can afford.

Providers such as Kikka Capital have an online application process with no paperwork required. Your business is evaluated through credit assessment technology and you pay no establishment or monthly fees.

Repayment periods are usually short, ranging from three months to three years. The quicker you repay this loan, the more you save on interest and the better your credit profile. Lenders will more readily grant another loan to a responsible borrower.

Rates last updated September 26th, 2018
Name Product Min Loan Amount Max. Loan Amount Loan Term Application Fee Product Description
NAB QuickBiz Loan
$5,000
$100,000
1 to 3 years
$0
Apply for up to $100,000 and get a response within 60 seconds. No upfront or ongoing fees and a transparent fixed rate.
Lending Express Business Loans
$5,000
$500,000
0.25 to 2 years
$0
Apply online for up to $500,000 and get access to over 25 lenders through Lending Express.
Valiant Finance Business Loan Broker
$5,000
$1,000,000
0.25 to 5 years
$0
A Small Business Lending Specialist from Valiant Finance can give you access to competitive business loans from over 60 lenders. Loans between $5,000 and $1 million are available. Request a call – your loan can be funded in 1 business day.
Moula Business Loan
$5,000
$250,000
0.5 to 2 years
$0
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.
Prospa Business Loan
$5,000
$250,000
0.25 to 2 years
$0
A business loan available up to $250,000 that can be funded in 1 business day. Must have a turnover of $6,000+ per month and provide 6 months of trading history, 3 months history for existing business purchases.
GetCapital Flexible Business Loan
$5,000
$500,000
0.5 to 2 years
Initial draw down fee
A flexible business loan up to $500,000 with convenient top up and redraw facilities. Business must have been operating for 9 months+ and have monthly sales of $10,000+
businessloans.com.au Flexible Business Loan
$5,000
$500,000
0.5 to 2 years
Initial draw down fee
An unsecured business loan up to $500,000 that you can use for any business purpose. Transparent costs and redraw facility available.
OnDeck Business Loans
$10,000
$250,000
0.5 to 2 years
2.5% origination fee
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.

Compare up to 4 providers

  • Invoice factoring

Invoice factoring lets you borrow against outstanding invoices and repay the loan once your clients honour those invoices. This is a quick, easy way to fix a business’s cash flow problems without putting up property as collateral.

Depending on the company, you can have the money in your account within one business day of the application. This kind of funding can be an option for when you’re unable to fill an order because of a cash shortage.

Rates last updated September 26th, 2018
Name Product Min Loan Amount Max. Loan Amount Loan Term Application Fee Product Description
Waddle Invoice Finance
$20,000
$10,000,000
10+ years
$0
An innovative finance solution to support your cash flow and get your invoices paid. Loans are tailored to your business.

Compare up to 4 providers

business-invoice-wide

  • Purchase order financing

If you’re having trouble filling an order because of cash flow problems, you can apply for a loan where the lender pays your suppliers on your behalf. The supplier ships the order to your customer who pays the lender, and any profit from the transaction is deposited into your account.

Instead of demanding property as security, purchase order financing is granted based on your business profile, the risk of the orders, your clients’ and suppliers’ reputations and experience in the industry.

Besides providing financial breathing room, purchase order financing helps you take on bigger orders, increase turnover and streamline the supply chain. This boosts your business’s profile, thereby extending your customer base and eventually enhancing profits.

  • Trade finance

Similar to purchase order financing, a trade finance loan pays your supplier on your behalf so that you can deliver an order to your customer. You then repay the lender within the agreed-upon period.

Lenders work with foreign exchange partners to find the best interest rates, usually more competitive than those offered by traditional banks. Maximum loan amounts differ, with some lenders offering up to $5 million depending on the order. Repayment is made over a period of 120 days.

Available as a revolving line of credit, trade finance helps small businesses fulfill their orders without putting up their own assets as collateral. This type of loan can be ideal for businesses with suppliers and overseas customers. The lender acts as a third-party financier to facilitate the business deal while you get on with fulfilling the order.

  • Equipment finance

If you’re struggling with old or damaged equipment, you can apply for finance to purchase business equipment. Instead of demanding assets as collateral, lenders take into account the strength of your business and anticipated cash flow when considering your application.

Depending on the lender, you can get different loan types to finance a rental lease, financial lease or hire purchase. You then enter into a tailored contract to repay the loan over the agreed-upon period. Lenders like Capital Finance allow the option to purchase additional equipment during the loan and then adjust the repayment terms accordingly.


Acquiring a business loan doesn’t have to mean risking your property. Several traditional and alternative lenders grant funding based on financial health and projected income to boost your business.

Picture: Shutterstock

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4 Responses

  1. Default Gravatar
    TammyNovember 15, 2017

    Hi. I am wanting to purchase a cafe business that has been operating for a number of years but I don’t have a deposit or security, can you help me?

    • Default Gravatar
      JonathanNovember 15, 2017

      Hi Tammy,

      Thank you for your inquiry. We understand that you wish to have some financing for your business venture.

      You can review your lending options for loans designed for restaurants, cafes, or bars.

      It is noteworthy to know that their loan requirements and eligibility may vary, so it’s important to check them before taking up the loan. Alternatively, you may speak with a business loan broker for more comprehensive advice.

      Hope this helps.

      Cheers,
      Jonathan

  2. Default Gravatar
    rogerApril 26, 2017

    Hi
    My credit rating is bad. I defaulted couple of times. I don’t have any property or car etc. I just opened a restaurant and put all my money into it. I don’t have enough money to sustain myself. Not enough money to pay to the staff. I need funding to support day to day running of the business.
    How to get loan for that..? and in my situation will I get loan when it is only three weeks old and there is no sound financials.
    Your prompt response is greatly appreciated.
    Regards
    Roger

    • finder Customer Care
      LouMay 7, 2017Staff

      Hi Roger,

      Thanks for your question.

      If you have a bad credit and are looking for a business loan, you can compare your options on this page.

      Cheers,
      Anndy

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