See which lenders will give you the best unsecured business loan. Instant online results.
This is a totally free process and will not affect your credit rating.
Borrow from $5,000 to $600,000
Fixed or variable interest rates
Repayments to suit your budget
Terms from 1 month to 5 years
Secured & unsecured options
Own a business and have an ABN
Business is GST-registered
Permanent Citizenship or Residency
Minimum business-operating time of six months
Can provide business bank statements
An unsecured business loan is a type of finance that allows a business to acquire funds up to $600,000 without providing collateral. The increased risk to the lender from lack of security is often reflected by shorter terms and higher interest rates compared to longer-term secured business loans.
These types of unsecured finance loans are supported by the current cash flow of a business. They work in a similar way to a secured business loan, with the main difference being that they do not require collateral (also known as “security”) from the borrower.
If you are approved:
A lender will provide you with access to funds
You will not have to provide collateral as security on the loan
You will have immediate ownership of anything purchased
You will make regular repayments to the lender for a fixed period of time
Borrowers can access cash without risking their personal or business assets, while lenders will often charge higher interest rates that reflect this increased risk.
These loans are very popular with:
Businesses looking to fund growth — i.e. Expansion, inventory, or renovations
Businesses with a stable monthly cash flow needing to access funds quickly
If you qualify for an unsecured business loan with a lender, you can use the finance for anything related to your business. Here are just some of the ways you could use the funds:
Assets and equipment
Buy or upgrade your equipment
Purchase extra stock in preparation for a busy period
Upgrade technology to improve efficiency, upgrade payment options or enhance your customer service.
Business continuity and security
Cover regular expenses such as tax, lease costs and insurance, where there is a timing issue between income and expenditure
Provide a working capital fall-back in case of income fluctuations or unexpected costs
Staff training and business expansion
Hire new staff
Develop and implement a new marketing strategy
Establish an online presence to attract new customers
Business or office fit-outs
Rebrand your business
Renovate or upgrade your premises
You'll also want to consider how repayments will align with how you plan to use your funds:
Typically, repayments will be daily or weekly to fit in better with your business cash flow. According to data provided by Prospa, 33 per cent of businesses make daily repayments, and the remaining 67 per cent opt for weekly repayments.
As there is no collateral on an unsecured business loan, they can be used by small businesses without any valuable assets to offer as security.
In fact, 38 per cent of borrowers own a business operating for less than three years, according to a report by Australian lender, Prospa.
They also allow faster access to cash than some other forms of finance, so are often used by established businesses who need to take advantage of their faster approval process over traditional business loans — an additional 38 per cent have been operating between 4 - 7 years (26%) and 8 - 10 years (12%).
Depending on your risk profile and your capacity to service your repayments, you may be able to borrow between $5,000 and $600,000.
As a rule of thumb, most lenders will consider a 12-month unsecured business loan equal to your monthly earnings. If your business earns $30,000 per month, you can generally borrow $30,000 on a 12-month term.
Qualifying is relatively simple. Most lenders will be able to provide options if you:
Have been trading for at least 12 months; and
Have an ABN (Australian Business Number); and
Are registered for GST.
If you don’t meet the above criteria, you can still get approved if you:
Are a sole trader
Have been trading for between 6 - 12 months.
There are two main types of applications, which will depend on the amount you wish to borrow.
If you are borrowing less than $100,000 the approval process will be fairly simple. If you wish to borrow more than $100,000, your lender will require additional documentation to assess your application.
If this is the case, you’ll need to provide additional documentation to the lender so they can better assess your application.
Here’s what you may need to provide to a lender when applying:
If you are borrowing less than $100,000:
Proof of identity
An ABN and GST registration
An acceptable credit rating — the lender will ask to conduct a credit check
Business bank statements
Trust Deed if the business is held in a trust
Australian Tax Office (ATO) Portal access.
If you are borrowing more than $100,000:
All the documentation provided if borrowing less than $100,000; and
Financial records (provided by your accountant)
Profit and Loss Statements
If you are making an application for more than $100,000, you can speak to your bank or a lender directly to discuss your financial circumstances and need for finance.
If you are applying for less than $100,000, you can generally apply online with a number of different specialist business loan lenders, including those who provide loans designed specifically for small businesses.
Lenders will assess an application based on the monthly revenue of the business, its intended use for the loan, how the loan will benefit future business revenue, and more.
Each lender will have different approval criteria, such as:
Minimum credit rating
Minimum and maximum loan amounts
A personal guarantee by the director of the company
You can use the Money.com.au smart form to compare loan offers from real Australian lenders, and apply directly for an unsecured business loan online with a number of specialist lenders.
These lenders offer the fastest approval speed in return for charging higher interest rates than a bank.
Unsecured business loans in Australia offer fast access to cash without requiring the borrower to put down an asset as security.
In summary, an unsecured business loan:
Gives a borrower access to cash
Does not require security or collateral
Will often have higher interest rates and fees
May be advertised with different types of interest
May require a personal guarantee from the business director