A business loan is money borrowed for a business purpose, whether that is covering cash flow, buying equipment, funding growth, or purchasing an existing business. Unlike a personal loan, it is assessed against your business’s income and trading history rather than just your personal pay slip, and the type of loan that suits one business often looks nothing like the right fit for another.
This guide pulls together everything you need to understand about business loans in Australia, what the different types are, what they cost, and where to go deeper on the specifics that matter to your situation.
A business loan is finance provided to a business rather than an individual, assessed against the business’s turnover, trading history, and ability to service the repayments. Loans are generally used for working capital, equipment and vehicle purchases, business expansion, debt consolidation, or buying another business outright.
Lenders range from the major banks through to specialist non bank and online lenders, each with different appetites for risk, different documentation requirements, and different pricing. This is why the same business can receive meaningfully different offers from different lenders for what looks like an identical request.
Secured business loans use property or business assets as collateral in exchange for a lower rate and a larger borrowing limit. Our Secured Business Loans guide covers how this works, what counts as acceptable security, and how much you can typically borrow.
Unsecured business loans require no asset as security, trading a higher rate for speed and accessibility. Our Unsecured Business Loans guide covers eligibility, typical loan sizes, and the personal guarantee most lenders require.
Business car loans finance a vehicle for business use, with structures like a chattel mortgage allowing GST credits and depreciation claims a personal car loan cannot offer. Our Business Car Loan guide covers the different finance structures available.
Business purchase loans finance buying an existing, already trading business, assessed against both your own position and the business you’re acquiring. Our Business Purchase Loan guide covers deposit requirements and due diligence.
Business lines of credit and overdrafts provide ongoing access to funds up to a limit, with interest charged only on the amount drawn, suiting businesses with fluctuating short term cash flow needs rather than a single lump sum requirement.
Equipment and asset finance uses the asset being purchased as its own security, often making it accessible to newer businesses that would not otherwise qualify for a general secured loan.
This depends heavily on the type of loan. A standard working capital business loan, secured or unsecured, generally does not require a deposit in the way a home loan or a business purchase does, though lenders may ask for a personal guarantee or a portion of funding to come from the business itself.
Where a deposit genuinely matters is business acquisition finance, buying an existing business, where lenders typically expect a deposit somewhere between 20% and 50% of the purchase price. Our Business Purchase Loan guide covers this specific scenario, including how vendor finance can reduce the cash deposit required.
The process looks broadly similar across loan types: working out how much you need, checking your eligibility, gathering documentation, comparing lenders, and applying. Our full step by step walkthrough in How to Get a Small Business Loan in Australia covers each stage in detail, including what documents to prepare and how long approval typically takes.
Before you apply, it’s worth understanding what lenders are actually assessing. Our Business Loan Requirements guide sets out the trading history, turnover, and credit file criteria that apply across most lenders, along with what’s realistically available if your business is a startup with no trading history yet.
Business loan interest rates move with the official cash rate set by the Reserve Bank of Australia and vary significantly depending on whether the loan is secured or unsecured, your business’s risk profile, and the lender. On RBA data, average lending rates differ noticeably between small, medium, and large businesses, with smaller businesses generally paying a premium that reflects perceived risk.
Our Business Loan Interest Rates guide breaks down current benchmark figures and what drives pricing, while our Business Loan Rate Comparison guide covers how to properly compare offers beyond the headline rate, since fees and loan term can change which offer is genuinely cheaper.
Before committing to any figure, run your numbers through our Business Loan Calculator, which shows your actual repayment, total interest, and total repaid for a given amount, rate, and term.
If you already have a business loan and your circumstances, or the market, have changed since you took it out, refinancing may be worth exploring. Our Refinance Business Loan guide covers when switching lenders genuinely saves money once exit fees and new establishment costs are factored in, and when it isn’t worth the effort.
There is no single best business loan, only the structure that fits what you’re actually trying to do.
ASIC’s Moneysmart has independent guidance on comparing credit products generally, worth reading alongside any lender’s own material before you commit.
A broker compares your options across a panel of banks and non bank lenders at once, rather than you approaching each one individually and collecting a separate credit enquiry with every attempt. Lodestar Finance’s Business Loans service does exactly this, comparing structures and lenders to find what actually fits your business rather than pushing a single product.
FAQs
Generally an unsecured facility with a shorter trading history requirement, though it typically carries a higher rate than secured lending. Eligibility still depends on turnover, credit history, and cash flow.
For standard working capital lending, yes, most secured and unsecured business loans don't require a deposit in the way a purchase or property loan does. Acquisition finance to buy an existing business is the exception, where a deposit is typically expected.
This varies enormously depending on whether the loan is secured or unsecured, your turnover, trading history, and the lender. Unsecured facilities commonly range up to $250,000 to $500,000, while secured lending against property can go considerably higher.
A broker doesn't replace the bank, they compare bank and non bank options on your behalf, which is useful if you're unsure which lender is likely to approve your application or want to avoid applying to several separately.
Simple unsecured applications can be approved within a day or two. Secured loans involving property or larger amounts generally take longer due to valuation and more detailed credit assessment.
A fast business loan can genuinely settle within 24 to 48 hours in the right circumstances, but “instant approval” in the literal sense doesn’t exist
Getting a start up business loan is harder than financing an established business, because the thing most lenders rely on most, trading history, doesn’t exist
Having bad credit makes getting a business loan harder, not impossible. Mainstream lenders rely heavily on your credit file, but it isn’t the only thing
