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Compare Unsecured Business Loans & Rates
Updated 24 Jun 2025
Get the best unsecured business loan rates you qualify for from 30+ lenders. Low rates on loans from $5,000 - $500K+
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What is an unsecured business loan?
An unsecured business loan is a type of business finance that allows you to borrow funds without providing any business or personal assets as security (collateral) for the loan. Instead, unsecured finance relies on the trading position of your business — including your trading history, plus current and projected cash flow.
Having no security backing the debt increases the risk to the lender, making it harder for them to recoup losses if you can't repay the loan. As a result, unsecured business finance comes with higher interest rates than secured business loans (which lower the lender’s risk due to collateral). Unsecured business loans also have shorter loan terms.
How they work...
- Borrow anywhere from $5,000 to $500,000+
- Interest rates start from 12% p.a. (for prime business borrowers)
- Choose between a fixed or variable rate
- Loan terms from one month to 5 years
- Simpler approval process since the lender doesn't have to appraise any collateral
- Some lenders charge no establishment or admin fees
- Can be used for any genuine business purpose (e.g. increase working capital, buy stock)
- Available to businesses, sole traders and self-employed individuals
- Usually require a personal guarantee from a business director
Unsecured small business loans in Australia
Unsecured loans are particularly suited to small businesses who need accessible funding, but lack assets to offer as security for their finance. The vast majority of businesses in Australia (around 98%) are small businesses and more than 90% of loan requests are made by SMEs, according to Money.com.au data. In 2025 there’s been a significant uptick in business lending to SMEs, according to unsecured business lender, OnDeck, as lower interest rates bring borrowing costs down for businesses. The construction and trades sector continues to be a big driver of unsecured borrowing. Business cashflow remains the main driver behind a lot of funding requirements.
Top industries for unsecured business loans
Construction & Trades
14.17%
Professional & Business Services
10.47%
Personal Services
5.83%
Hospitality & Food
5.73%
Automotive & Transport
4.71%
Source: Money.com.au borrower data
Why businesses need unsecured finance
Seasonal cashflow
For industries that experience seasonality or cyclical business, unsecured finance helps smooth out those bumpy roads in cash flow throughout the course of a trading year.
Debt consolidation
This is particularly common for businesses with tax debt. An unsecured business loan allows you to combine multiple debts under one loan making it simpler and often cheaper to service.
Stock & new fit outs
Unsecured business finance can be suitable for large, one-off inventory purchases. For example, if you’re fitting out and stocking a new premises. The funds can then be prepaid gradually in line with sales.
Rainy day buffer
For businesses who don’t want their operations to be derailed by potential cashflow troughs or unforeseen costs down the track, unsecured finance (through a line of credit) can act as a funding backstop.
Phil Collard, Money.com.au Business Finance Broker
"Building and trade businesses requiring cashflow is a pretty common use case for unsecured finance becuase of the end of year and January shutdown across most builders, which then cascades down to subcontractors. These businesses are potentially going up to eight weeks without being paid, but they still need to run their business and cover overheads. That’s when a short-term loan or a line of credit sitting in the background can be incredibly valuable."
Phil Collard, Money.com.au Business Finance Broker
The average unsecured loan amount requested by businesses for working capital is $118,833, according to Money.com.au's analysis of thousands of borrowers who came to us looking for a loan.
What are the best interest rates on unsecured business loans?
Interest rates on unsecured business loans start from around 12-20% p.a. but can be higher in some cases. Rates are generally higher on unsecured business loans to offset the lender’s risk of providing finance without collateral. These are the main factors that impact your rate.
1. Asset backing
If you've got asset backing (so if the director of the business owns property in their individual names or jointly with a spouse) that's viewed favourably.
Although there's no security required, being asset backed could still mean a better interest rate with some lenders. If you’re not asset backed you can still generally get the funding, but potentially at a higher cost.
2. Time trading
Your time in business has a big impact on unsecured business loan rates. Most lenders would want to see you have been in business and GST-registered for at least 12 months for you to qualify for their best rate. Some lenders have an even higher hurdle (e.g. 3+ years trading) for their best rates.
3. Other debts
Having manageable debt obligations elsewhere can help you secure a lower rate on your unsecured finance. Tax debt is probably the big one here. Lenders will want to make sure that even though you may have a tax debt and be on a payment plan, you are contributing to that tax obligation consistently.
4. Banking conduct
Lenders have tools to be able to quickly skim through a set of bank statements and grade a customer accordingly and tier them into certain pricing buckets. This covers things like payment dishonours, being regularly overdrawn, erratic spending and large unaccounted for cash withdrawals.
5. Loan term
In some cases, reducing your loan term means you may get a lower rate. The reason being, a shorter term reduces risk for the lender. But the drawback is you won’t necessarily feel the benefit of a lower rate as you will have higher repayments due to the shorter repayment schedule. Dedication on your loan term is a balancing act between lowering the finance costs (interest and fees) versus the cashflow impact of a more aggressive repayment term.
6. How good your broker is
Business finance brokers often have some wiggle room with lenders to negotiate pricing. This is on a case-by-case basis, but if we can present a strong enough case for the customer, then lenders are normally happy to negotiate on the rate.
TIP: Some lenders may display a ‘factor rate’ instead of a traditional annual percentage rate (APR) on unsecured business loans with a short term. A factor rate is expressed as a multiple of the loan — for example, 1.15 times the loan balance.
Compare unsecured business loan rates
To give you an idea of the current rates on unsecured business loans, we have rounded up the offers from a selection of prominent lenders.
Lender | ANZ |
|---|---|
Unsecured finance rates from | 11.49% p.a. |
Loan amounts | $10,000 - $500,000 |
Lender | Dynamoney |
Unsecured finance rates from | 14.90% p.a. |
Loan amounts | $5,000 - $500,000 |
Lender | Great Southern Bank |
Unsecured finance rates from | 11.95% p.a. |
Loan amounts | $20,000 - $50,000 |
Lender | Liberty |
Unsecured finance rates from | 14.20% p.a. |
Loan amounts | $50,000 - $500,000 |
Lender | NAB |
Unsecured finance rates from | 12.95% p.a. |
Loan amounts | $5,000 - $250,000 |
Lender | Shift |
Unsecured finance rates from | 14.95% p.a. |
Loan amounts | $25,000 - $1 million |
| Lender | Unsecured finance rates from | Loan amounts |
|---|---|---|
ANZ | 11.49% p.a. | $10,000 - $500,000 |
Dynamoney | 14.90% p.a. | $5,000 - $500,000 |
Great Southern Bank | 11.95% p.a. | $20,000 - $50,000 |
Liberty | 14.20% p.a. | $50,000 - $500,000 |
NAB | 12.95% p.a. | $5,000 - $250,000 |
Shift | 14.95% p.a. | $25,000 - $1 million |
How much will your repayments be?
See your estimated unsecured business loan repayments per week, fortnight or month.
Business loan repayment calculator
Compare unsecured business finance options
Unsecured business loan
An unsecured business loan is structured similarly to a secured business loan, except the lender doesn’t have to appraise any collateral or register any interest on the Personal Property Securities Register (PPSR) until you pay off the loan.
Aside from that, it's much the same as any business loan. You’ll borrow a lump sum from a lender, which you’ll repay with interest through scheduled repayments over a fixed period (called your loan term). Typically, repayments will be daily or weekly to fit in with your business cash flow.
Lenders generally require a personal guarantee from a business director. This makes you or any director(s) personally liable for the debt. If your business can’t repay the loan, you’ll have to pay it back.
Unsecured business loan pros & cons
Pros
- Doesn't require personal or business collateral.
- Fewer upfront costs as there’s less paperwork involved & no asset valuation required.
- No early payout fees (in most cases).
- Faster application process & you could get funding within one business day in some cases.
Cons
- Higher interest rate than a secured business loan.
- Stricter eligibility requirements may apply, as lenders will pay particular attention to the integrity of your bank statements.
- Limited borrowing amounts compared to secured finance.
- Generally requires a personal guarantee from a company director.
Unsecured business line of credit/overdraft
A business line of credit gives you access to a specific amount of funds whenever you need (up to your credit limit). You can use part or all of the funds, pay it back and use it again (think of it as an open-ended loan). You’ll only pay interest on the amount you withdraw, not the entire credit limit. Some lenders advertise this as a business overdraft but it's the same thing generally.
Business line of credit pros & cons
Pros
- Ongoing access to funds without needing to reapply each time you need to borrow.
- Only pay interest on the funds you draw down (not the entire limit).
- Generally more flexible repayment options – e.g. you can repay the entire balance in one one go if you receive a large customer patent.
Cons
- Can become expensive if you have a large ongoing balance.
- There are generally some ongoing fees whether or not you use the facility.
- Not as suitable if you want a one-off injection of credit – it will be an ongoing liability on your balance sheet.
Business credit card
You can use a business credit card to access unsecured funds up to an agreed limit. There’s usually an interest-free period when no interest is charged on purchases if you pay your closing balance in full each month. You must repay the minimum balance each month to continue accessing that limit.
Business credit card pros & cons
Pros
- A simple way to access funds on an ongoing basis.
- Doubles as a payment method for business expenses.
- More premium cards offer access to rewards points, complimentary travel insurance and other perks.
Cons
- Interest rates are generally higher versus other forms of unsecured finance.
- Credit limits are usually capped at around $100,000.
- You may incur fees of 1-2% when using it for payments, depending on the vendor. FX fees usually apply too.
Alternative unsecured finance options
There are also a number of alternative unsecured finance options offered by specialist lenders.
These include:
- Trade finance
- Merchant cash advance
Who’s eligible for an unsecured business loan?
Generally, the minimum eligibility requirements for an unsecured business loan in Australia include:
- Australian citizenship or permanent residency
- An active ABN or ACN
- Your business must be GST-registered
- At least six to 12 months of trading history
- A minimum annual turnover of $75,000- $100,000 (depending on the lender)
- The ability to provide financials or bank statements
- A good credit score — the minimum business credit score is 475; it's about 500 for company directors
- You and other directors will need to provide a personal guarantee for the loan
Being a homeowner can make getting an unsecured business loan easier (or it may be a requirement depending on the lender). It can also mean being able to borrow more. Most Money.com.au business borrowers (55%) are homeowners and on average they request to borrow around 64% more than non-home owners.
How to apply for an unsecured business loan
Lenders will review applications for an unsecured loan based on your business’ monthly revenue and the intended use for the loan. Each lender will have its own approval criteria and the process may be different depending on the loan amount (e.g. a director guarantee may be required).
If you’re borrowing less than $100,000
You can generally apply online with a bank or non-bank lender, including those who provide loans designed specifically for small businesses. The approval process will be fairly simple. You’ll need to provide:
- Proof of identity (e.g. driver’s licence, passport)
- Proof of ABN and GST registration
- An acceptable credit rating
- Business bank statements
- Australian Taxation Office (ATO) Portal access
- A trust deed if your business is held in a trust
If you can’t provide standard business documents with your application, you could consider a low doc business loan.
If you’re borrowing more than $100,000
Your lender will require additional documentation to assess your loan application, including:
- Financial records (provided by your accountant)
- Profit and loss statements
- Business balance sheets
More business loan guides
FAQs about unsecured business loans
What can you use an unsecured business loan for?
The most common reasons businesses apply for unsecured financing is to provide working capital to smooth over cash flow, according to Money borrower data. But it can be used for more or less any genuine business purpose, including:
- Cover regular expenses such as lease costs and insurance when there’s a cash flow shortfall
- Upgrade or repair business vehicles or equipment
- Rebranding & marketing costs
- Fit out or upgrade to business premises
- Hire and train staff for business expansion
- Upgrade technology to improve efficiency (e.g. buy new payment systems)
- Pay business-related debts, including ATO debts
- Buy another business to expand your operation or buy out a business partner
- Additional stock purchasing for the business
Which lenders offer unsecured business loans in Australia?
Here are some of the main lenders offering unsecured business loans in Australia:
- ABR Finance
- ANZ
- Banjo
- Bizcap
- Business Fuel
- Butn
- Capify
- Finance One
- GetCapital
- Grow Finance
- Lumi
- Moula
- NAB
- OnDeck
- Prospa
- Shift
- Westpac
How much are the fees on an unsecured business loan?
The standard fees you may find on an unsecured business loan include:
- Application fees: Can range from 3-6% of your loan amount
- Monthly account keeping fees: $0 - $30
- Early payout fees: If any, early payout fees can range from $0 - $450
- Brokerage fee (if applicable): Can range from 3-8% of your loan amount
This is based an analysis of selected lenders by Money.com.au. Fees can significantly impact your borrowing costs, so consider negotiating with your lender (and broker) to reduce them.
What is collateral on a business loan?
A collateral is an asset or something of value owned by your business that can be used as security on a loan. It can include company vehicles, equipment, and inventory or be a personal asset such as your home or any other residential property. Unsecured business loans do not require collateral, which is why they are referred to as ‘unsecured’.
What is a personal guarantee?
A personal guarantee is a legal commitment (as a company director or including a group of directors) to cover any outstanding loan amounts should you default or fail to meet your repayment obligations. Personal guarantees are unsecured, which means they aren’t tied to specific assets you own. They represent a legal obligation to repay an agreed amount. There are several types of personal guarantees:
- Unlimited personal guarantee: This is a promise to cover the entire loan cost should the business be unable to repay the loan. This is the riskiest option for borrowers and the least risky for lenders.
- Limited personal guarantee: This involves the lender setting a figure of how much you’d owe in the event of a default or business failure.
- Joint or several guarantee: This is similar to a limited personal guarantee, where a number of business owners offer personal guarantees for a fixed percentage of the loan amount. A joint or several guarantee means each guarantor will be responsible for paying off the full loan amount should the others be financially unable.
Do I need a deposit to get an unsecured business loan?
No, you generally won’t need a deposit to get an unsecured business loan if your business financials show you can comfortably service the loan. A deposit is essentially a type of upfront collateral that can help reduce your monthly repayments and potentially help you get a better interest rate.
Can I repay my unsecured business loan early?
Yes, most lenders in Australia will allow you to repay an unsecured business loan early. Most lenders analysed by Money.com.au do not charge early payout fees or break costs. But when in doubt, it’s best to check with the specific lender before you repay your finance early.
Can I get an unsecured business loan if I have bad credit?
Yes, you can still get an unsecured business loan if you have impaired credit, although some lenders may not provide finance if you’ve had a prior or recent bankruptcy. Consider applying for a bad credit business loan via a specialist lender, but keep in mind that higher interest rates apply.
What happens if I default on an unsecured business loan?
If you default on an unsecured business loan, the lender will generally proceed with a debt collection, and a default may be recorded on your credit report. According to Equifax, payment defaults can stay on your credit file for up to five years. This may make it more difficult to get approved for future loans.
Is it faster to get approved for an unsecured business loan?
Yes, it’s typically faster to get approved for an unsecured business loan versus a secured one. The simple reason for this is with an unsecured loan the lender does not need to factor in an asset into their approval criteria. Instead your loan is approved based on your business financials and credit history.
When should I choose an unsecured loan over secured finance?
An unsecured business loan may be more suitable in the following scenarios:
- You are looking for short-term finance
- The finance is being used for multiple or unspecified costs
- Your business does not own any assets that would be suitable to be used as security
- You are buying an asset that will not qualify as security (e.g. a very niche piece of equipment or one being sourced from overseas)
- The item you are purchasing will depreciate in value quickly making it ineligible with lenders
However, if you are purchasing a big-ticket asset, such as a vehicle, this is when a secured loan (chattel mortgage) will likely be more appropriate.
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Sean Callery is the Editor of Money.com.au. He has over 15 years of international experience. He is qualified with a Certificate IV in Finance and Mortgage Broking (FNS40821) and is compliant to provide general advice in Tier 1 General Insurance (RG 146) products.
Jared Mullane is a finance writer with more than eight years of experience at some of Australia’s biggest finance and consumer brands. His areas of expertise include energy, home loans, personal finance and insurance. Jared is qualified with a Certificate IV in Finance and Mortgage Broking (FNS40821).
