Best Australian Small Business Loans

  • Updated: May 7, 2021
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What’s in this Guide?


    Top 10 Australia Lenders In April 2021

    Below shows our list of the best unsecured business loan Australia providers.

    capify-logo

    – Best for small business loans overall

    bizcap-logo

    – The top lender for a fast business loanl

    zip-business-logo

    – Good for a large line of credit (500k)

    ondeck-logo

    – True short-term loan specialist

    moula-logo-rescaled

    – Top SME business loans due to Interest-free period

    prospa-logo

    – Best For Low Doc Loans Under $150k

    banjo-logo-rescaled

    – Top for simple application with no paperwork

    beyond merchant capital logo

    – Good merchant finance up to $300k

    lumi-logo-rescaled

    – Fixed-rate loans for transparency

    getcapital logo

    – Offers the largest range of loans for all needs

    Top 10 Australia Lenders

    • 1Capify

    • Best Small Business Lender Overall

      Capify is FastBusinessLoans best small business finance provider overall based on their combination of fast loan application and approvals, decent funding amount and flexible repayment terms.

      Capify borrowers can choose either unsecured short-term small business loans or merchant cash advances of $5,000 to $300,000 with a loan term of 3 to 12 months. To qualify for a business loan, the business needs to have been operating for 6 months with $10,000 in turnover, the bar is slightly higher for a merchant cash advance with 12-month trading and $15,000 turnover.

      While a maximum 12-month repayment term may not sound long, the average loan will typically be 75% to 100% of your average monthly turnover so short repayment periods encourages responsible borrowing. Repayment is fixed daily for business loans and daily direct debit for a merchant cash advance which helps better manage your repayment loans as it avoids large lump sum repayments.

      Application with this fintech lender can be done online in minutes with no financials, tax returns or BAS required for loans under $75,000.  If all required details are provided then you can expect funding to your business bank account completed with 24-48 hours.  With such a straightforward process, this allows you to avoid the long application and funding process typical of banks and focus on growing your business.

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    • 2BizCap

    • Best Lender For Fast Finance

      Getting an unsecured business loan with Bizcap can be done in quick time. An online application takes only 5 minutes and no paperwork is required. The loan application can be approved in just 1 hour and funding transferred to the business bank account in as little as 3 hours. Bizcaps ability to turnaround applications with speed means the business can focus on growing the business, rather than dealing with paperwork and red tape.

      Bizcap offers unsecured business loans of $5,000 to $600,000 with a repayment term of 3-12 months.  Payments can be daily or weekly and will vary to match your business high and low seasons. Should the business wish to repay the loan early, there are no penalties or costs.

      The lenders promote themselves as Australia’s most open-minded lender as they have a very high approval rate.  As long as you meet Bizcap’s minimum eligibility requirement of 5 months of trading and $10,000 in turnover per month, there a high chance of loan approval. Bizcap looks at more than the businesses credit score, history of bad credit, defaults, bankruptcy or judgement from previous financial hardship and instead place more value on existing cashflow and existing balance sheet.  Unlike the majority of lenders, Bizcap will even lend if the business has a loan with a competing lender.

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    • 3Zip Business

    • Good Line Of Credit Up To 500k

      Formerly known as Spotcap, Zip Business offers an unsecured business line of credit. A line of credit has some advantages over a small business loan as it allows the business to maintain control over its borrowings. With this type of finance, your business will only pay interest for the funds that are drawn from the credit facility. This makes a line of credit a good option when the amount of funding you need is not known.

      A line of credit with Zip Business can be up to $500,000 and converts to a loan (or advance) when a drawdown is made. Repayments for these drawdowns range from 1-36 months. To be eligible for a business loan, your business needs to have been operating for 18+ months, achieve a turnover of $200,000 per year and be a profitable business.

      Each drawdown has an origination fee of 2-3% plus the interest rate costs. Zip is transparent with its costs and has no monthly fees, hidden fees, early repayment fees or application fees.

      Consider Zip business if you want access to one of the largest lines of credit facilities around. The fintech lender will generally lend around 1 months worth of revenue or 10% of annual revenue.

      The Zip Business is also best if your business needs easy access to a credit facility but wishes to maintain flexibility as your business don’t know how much it needs to borrow.

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    • 4Ondeck

    • True Short-Term Loan Specialist

      Ondeck specialises in just one lending product, this being short-term unsecured business loans. While other lenders, may offer more financial products, the choice of products can be overwhelming. OnDeck by having just one product means they specialise and work harder to make their product work for your business needs.

      Loans with Ondeck are between $10,000 and $250,000, while these loans are less than some other non-bank lenders, they are perfect for many small businesses. With this amount, you get a generous repayment term of 6 to 24 months. To qualify for a loan, your business must have been trading for 1 year or more, have $100,000 in yearly revenue, a business credit score of at least 500 and no previous bankruptcy.

      The online application process takes only 10 minutes as you only need to fill in 15 fields and includes an automatic check of your credit score.  Approval and funding following the application can be done within 1 business day which allows the business to resolve capital needs fast.

      Ondeck is a member of the AFIA code of conduct agreement. At your request, they will provide you with a SMART Box™ statement with their quote. This means no hidden fees, full transparency and the ability to compare with other lenders with SMART Box™

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    • 5Moula

    • Best Interest-Free Period

      Moula offers unsecured business loans and Moula Pay, a credit card / buy now pay later type of finance with 3 months interest-free.

      If you are after a lender that is transparent, Moula is one of the best as they are one of the few lenders to advertise their interest rate range. Moula’s advertises an Annual Percentage Rate (APR) of 14.95% to 34.95%. This metric unlike simple interest rate (common with other lenders) includes all costs so is a true and honest reflection of how much you will pay. Moula also provides SMART Box™ statements which means no hidden fees and in a format that is easy to compare with other lenders that also offer SMART Box™.

      Business loans with Moula are between $5,000 to $250,000 and have a 12-24 months repayment term. Moula promises there are no hidden fees such as debit charges or early repayment penalties.

      Moula’s other product, Moula Pay is similar to a business credit card or Buy Now Pay Later that gives you to access a credit facility so is a good option for flexibility. You can use this with any participating Moula Pay merchant. Interest costs are 3% per month but the first 3 months are interest-free meaning if you clear the debt at this time, there will be no costs. There is also an annual fee of $149 (with the first 12 months being free).

      To apply with Moula, your business needs to have 6 months of trading, earn $5,000+ in monthly sales and have GST registration if yearly turnover is over $75,000.

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    • 6Prospa

    • Top For Large Low Doc Loans 

      Prospa offers small business loans and business lines of credit. A business loan is a lump sum that requires interest payment from the commencement of the loan, so is a good choice when your business knows how much capital they need to borrow. Prospa’s business line of credit is a smarter choice when your business does not know how much funding it will need but may need to draw from a credit facility should there be immediate costs in future. In this situation, a line of credit is a good option as the business only pays interest for capital drawn from the credit line.

      Small business loans with Prospa range between $5,000 and $300,000 and have a term of 3 to 36 months. Your payments can be either daily or weekly. This is a good choice for one-off expenses such as equipment, machinery or vehicles when the cost amount is known. One thing to consider is that loans over $100,000 will require asset security.

      Funding for a business line of credit is between $2,000 and $100,000 and can be extended a further 12 months after one year. A credit facility is a good choice for managing cash flow, staff wages, unpaid invoices.

      When applying for a loan, your business must have been operating for 12 months and have $4,000 to $6,000 p.m turnover. Loans under $150,000 are low doc meaning they do not require financials and tax returns which simplifies and speeds up the approval process.

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    • 7Banjo Loans

    • Easy Application With No Paperwork

      Banjo Loans offers working capital loans of $20,000 to $5000,000 with a 6 to 24-month term if your business has at least 2 years of trading history and earns $500,000+ p.a in revenue.

      Business loan applications with Banjo have only 10 simple questions, need no paperwork, integrates with your accounting software and accepts electronic signatures which make for a fast and hassle-free process.  The lender’s technology will then access multiple sources of your business data so they can approve your loan in hours. All this means you can have your funds deposited into your account in as little as 24 hours.

      Banjo rewards good business, if your business has good creditworthiness and solid cash flow then the lender can offer better interest rate cost. You can also expect easy re-borrowing in future as Banjo streamline the process for existing customers.

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    • 8Beyond Merchant Capital

    • Good Merchant Finance Up To $300k

      Beyond Merchant Capital offers unsecured business loans and merchant cash advances. Both products offer business lending between $10,000 and $300,000 as a lump sum payment with the amount you can borrow being around 1 month of average turnover.

      The difference between each product is the means used for the loan repayment. Business loans have automatic daily payment instalments using direct debit while merchant finance takes a percentage (%) of your daily EFTPOS sales.

      Use of a merchant cash advance can be a good business plan if your business makes the bulk of sales through EFTPOS, debit cards or credit card sales. This is because your daily repayments for the loan will vary in line with your sales which have seasonal peaks and troughs throughout the year.

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    • 9GetCapital

    • Good Range Of Loans For All Needs

      GetCapital offers a range of finance options to meet the needs of all small business owners. If your business requires funding upfront as a lump sum or prefers to access funds from a credit facility on an as needs basis, GetCapital will have the right solution for your needs. The following type of loan options are available with GetCapital:

      • Business Overdrafts
      • Working Capital Facility
      • Import Line of credit
      • Term Loans
      • Equipment Finance
      • Vehicle Finance,
      • Fitout Finance

      All products allow your business to borrow up to $1,000,000 in funding with the exception of asset finance which goes up to $750,000. Business rate loan pricing for all products range from 9.95% to 19.95% (annual percentage rate) however import line of credit has a maximum higher interest rate of 24.95%.

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    • 10Lumi

    • Fixed-Rate Loans For Transparency

      Choosing Lumi means no hidden fees and charges as the lender prides itself on total transparency. Lumi is a founding signatory of the industries code of lending practice SMART Box™ which means you will know the true cost of your loan in a plain and simple format. The SMART Box™ also has the benefit of allowing for realistic comparison with other lenders that are compliant with the code.

      Lumi first product is a small business loan. If you choose this, Lumi will advise your entire repayment amount upfront, as they don’t believe in variable interest rates. Your payments will follow an amortized payment schedule which means you will pay the same amount every week. The only certain cost you will have is a 2.5% establishment fee that is deducted at settlement.

      The other product Lumi offer is a line of credit. This option is best if you want to maintain access to a credit facility. Using a credit line has a $25 activation fee for each drawdown and a $30 monthly subscription fee to maintain the facility. Along with your interest which has a fixed rate and is calculated on a daily basis these are your only costs.

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    Business Loan Application Process


    Small business owners looking for a finance option will require an AFSL and financial statements. To access the creditworthiness of the company the business lending provider will commonly use bank statements and review existing line of credit such as business credit cards to determine the loan amount, pricing, and installments. A higher rate loan will apply for bad credit Australian businesses with late payment and upfront fees also been applied. In some cases, a business plan may be also required if the lender is unsure how the business will meet the loan repayments requested.

    Business Loan Application Process


    Running and maintaining a business is generally expensive, which means you will need access to capital to cover these expenses. Getting a business loan is one convenient option to pay for these expenses.

    Lenders can lend your business capital to pay for expenses that you are unable to cover yourself but will charge interest on the loan. Common reasons your business may need to take out a loan include:

    • Purchasing or hiring/lease of equipment or IT software
    • Purchase or lease of office and shopfront premises
    • Operation costs such as staff wages, marketing campaigns


    Loans can be secured loans (sometimes called equity loans) or unsecured loans which both offer their own benefits and cons. Like with the available loan types, it helps to be familiar with the differences between backing a loan with an asset or not.

    You will also need to make a decision between a term loan and a line of credit (including business overdraft).

    A term loan means your business will receive the entire loan upfront as a lump sum with a set repayment period. Nearly all types of loans will be a type of term loan.

    A line of credit and business overdraft are two examples of loans that are not term loans. With these types of loans, you have pre-approved access a credit facility up to a specified limit any time you need extra capital, much like a credit card.

    Once you have decided if your business prefers a secured or unsecured loan and a term loan or line of credit, then it is time to decide on the right type of loan for the needs of the business.

    Australian businesses have a wealth of options when it comes to choosing a business loan. Different types of loans are best for different purposes so it is worthwhile being familiar with the different types of loans available. Below we look at these types of loan options.

    1) Line Of Credit


    Similar to a business credit card, a line of credit allows an Australian business to access funds from a credit facility up to a maximum amount. A business owner can withdraw funds when they need it and will pay variable interest rates only on the amount you drawdown from the facility.

    A line of credit is a very flexible type of loan as you can access pre-approved funds anytime you need. This arrangement you only pay interest costs on the amount they use meaning you can avoid paying costs of capital you don’t use.

    What is a line of credit

    2) Asset Finance, Equipment Finance


    Similar to a business credit card, a line of credit allows an Australian business to access funds from a credit facility up to a maximum amount. A business owner can withdraw funds when they need it All businesses need assets to operate and these assets can be costly and have a reasonable but not unlimited lifespan. Examples include motor vehicles, IT Software, and machinery.

    Being able to fund these assets is critical if you wish to offer the same level of service as other competing businesses. As these assets are very costly, one option of to utilize a lender that will provide asset finance or equipment finance.

    What is Asset finance?

    Asset finance is a type of business loan where the asset you are financing acts as security.

    Finance for the purchase of the asset can be done with a number of arrangements including hire purchase, outright commercial hire purchase, finance lease, operating lease, novated lease, and chattel mortgage.

    Overall, asset finance requires some planning for a business as approval times are longer than a short-term business loan. The benefit of longer repayment terms and lower interest rates makes however makes asset finance a popular option for Australian businesses.

    What is asset finance

    3) Bad Credit Business Loans


    Bad credit loans (sometimes called poor credit or second chance loans) are for businesses are an option for businesses with a poor credit score.

    If your business has a poor record of paying debts in a timely manner, a previous default, or bankruptcy then your business may not qualify for a loan with many lenders. Businesses with poor creditworthiness present a high risk to many lenders, so are not model candidates for a loan.

    Businesses with poor credit need to find lenders willing to offer loans to businesses with bad credit.  There are two basic ways you can convince lenders you will honour the debt. A secured loan meaning the loan is backed with business assets or with an unsecured loan showing good financials such as cashflow (proven with bank statements).

    Bad credit loans

    4) Invoice Finance


    If your business model revolves around invoicing clients, then invoice finance can be a good option to obtain capital.

    Invoice finance means you are giving your outstanding invoices to lenders in return for a cash advance of up 100% of the invoice value. Invoice finance means your business does not need to wait up to 90 days for the client to settle their debt as the lender will provide you with immediate funding.

    There are two basic types of invoice finance. Invoice factoring and invoice discounting. Factoring means the lender will be responsible for collecting the amount owing from the client owing, invoice discounting means your business will collect from the billed client.

    What is invoice finance

    5) Business Overdraft


    A business overdraft allows your business to access a revolving credit facility up to a maximum predetermined limit sent by the lender. This type of funding working much like a line of credit, the difference is the overdraft is attached to a business debit account or trading account.

    Your business may benefit from a business overdraft if you need to withdraw amounts larger than the business debit account has available.  Using an overdraft means your business can access a credit facility to maintain cash flow by accessing a credit facility.

    Business overdrafts only charge interest on the amount overdrawn, as rule overdrafts often attract the highest interest rates of any loan type. So while this finance option is the most convenient, it also has the highest pricing with higher interest rates and often have additional overdraft fees.

    What is a business overdraft

    6) Merchant Cash Advance


    A merchant cash advance (MCA) allows SME owners to receive finance upfront and pay for the advance using a percentage of the business’s future daily or weekly sales. Unlike other loans, security is not typically required.

    This type of finance is only an option for businesses who collect all their sales payments through credit cards, debit cards, and EFTPOS systems.

    Payments are automatically debited daily or weekly and usually have fixed interest meaning payments are consistent with the volume of sales made during the payment period. For this reason,  an MCA is a good option for businesses that sales are seasonal. Businesses that are suitable for MCA include retail, hospitality, cafes, hotels and car servicing.

    What is a merchant cash advance

    7) Unsecured Business Loans


    As the name states, an unsecured business loan is a loan that does not need to be guaranteed with an asset. This type of loan is increasingly becoming one of the most popular types of loans in Australia as they are easy and fast to obtain.

    Most lenders have an easy online application process with no or little paperwork, that can result in your loan approved in hours.  While unsecured loans can have higher interest rates than a traditional loan, the speed of approval and funding provision can be preferable to many business owners.

    Lenders that provide unsecured loans do have minimum criteria the business will need to satisfy before approval they will grant approval. This includes a minimum time in business (usually 3 or more months) a minimum monthly revenue (usually $4,000 plus and a minimum credit score.  Loans also tend to be smaller than secured loans as the lender is taking on greater risk.

    What is a unsecured Business Loans

    8) Secured Business Loans


    Secured business loans or equity business loans are loans that are backed with collateral. Lenders will accept up to 100% of the value of the security which may include residential property and motor vehicles.

    If your business has suitable assets to guarantee the loan, then security can result in lower interest rates. Use of collateral can also mean access to larger loans as the lender will know they can recover their costs by claiming the asset in event of default.

    While there are certain advantages with secured loans, there are some cons. Not all businesses have assets they can use and there is a risk you can lose both the asset and the business in event of default. Secured loans also come with extra fees as the asset will need to be valued.

    What is a secured business loan

    9) Business Credit Cards & Buy Now Pay Later


    Business credit cards and buy now pay now (BPNL) style loans are good short-term loan options. Like a line of credit and business overdraft, credit cards and BPNL options provide access to a credit facility (up to a limit) that you can access when you need.

    While it is easy to assume business credit cards are the same as personal credit cards, there are subtle differences. Business credit limits are larger, insurance limits more generous and reward programs are tailored to business, not personal needs. Business cards also allow you to export your transactions into account software programs such as Xero.

    What is a Business Credit Card

    10) Low-doc and no-doc business loans


    Low-doc and no-doc business loans are options if your business does not have the proof of income to meet most lenders’ revenue requirements. You will commonly find that many unsecured loans have no or low doc requirements if you borrow less than $75,000 or $150,000.

    What is a No Doc and Low Doc Loans

    Unsecured Business Loans FAQs

    Can you get a small business loan with bad credit?

    Yes, a specialist lender can secure business finance for Australian companies with a bad credit score. Bizcap is one lender that provides working capital to lower credit score to assist with their cash flow needs.

    How much is a small business loan?

    An unsecured business loan for a small business can range from $5,000 to $250,000 depending on the credit history and cash flow status of the business. For larger amounts, an Australian business should apply for a secured loan that gives a fixed rate or variable interest rate option.

    What is the must-have of a lender?

    Any lender considered must have an Australian Credit Licence. While states like NSW and Victoria have additional protections for small businesses, these only apply to regulated providers with an AFSL.

    Can a new business get a loan?

    None of the loans in this comparison are applicable for new businesses. A lender requires evidence of ongoing cash flow in the form of bank statements or other financial statements. Generally, a start-up loan is only offered by specialist lenders or venture capitalist who charge a higher interest rate or will only offer a secured loan. Some new businesses will also apply for a personal loan with the funds then used for the business.

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