Small business loans that fit how small businesses actually work

Small businesses do not borrow the way big companies do. They do not have treasury teams, audited accounts or months to wait. They have an owner who is also the salesperson, the bookkeeper and often the person on the tools, and a need that usually has a date attached. This page sets out the small business loan options available in Australia, how each one works and how to choose without spending a week on research.

The main types of small business loan

Unsecured term loans. A lump sum repaid over a fixed term, assessed on your bank statements. Typically $5k to $500k. Good for one-off needs with a clear payback. See unsecured business loans.

Lines of credit. A limit you draw from and repay as cash comes in. Good for gaps that keep coming back, like wages between invoices. See business line of credit.

Low-doc loans. For owners whose financial statements are not up to date, assessed mainly on statements and basic tax information. See low-doc business loans.

Invoice finance. An advance against unpaid invoices to business customers. Grows as your sales grow. See invoice finance.

Equipment finance. Funding for machinery, vehicles and tools, usually secured against the equipment itself. See equipment finance.

Property-secured loans. Larger amounts, from $20k to $5m, backed by residential or commercial property. See secured business loans.

How to choose in three questions

1. What is the money for? A single purchase or bill suits a term loan. A recurring gap suits a line of credit. Unpaid invoices suit invoice finance. Equipment suits equipment finance.
2. How fast do you need it? If it is this week, unsecured options assessed on statements are the quickest. Secured loans take longer.
3. What can you offer? No property: unsecured. Property and a larger need: secured may cost less over time.

If you answer those three honestly, you will usually have the right product within a minute. If you are still unsure, send us a quick enquiry and a specialist will help you decide.

Why bank statements matter so much

Small business lending has shifted toward reading the business bank account directly. Statements show what financial statements cannot: the timing of deposits, the day-to-day rhythm of costs, existing repayments and whether payments bounce. For a small business whose accounts are a few months behind, that is good news, because the bank account is always current.

To make the most of it, run business income and spending through a dedicated business account, avoid mixing in personal transactions and keep an eye on dishonours. Our guide on how lenders read business bank statements explains what assessors look for line by line.

How much can a small business borrow?

Lenders size facilities against what the account can carry. As a rough approach, they look at average monthly deposits, subtract existing commitments and consider how variable income is. Seasonal businesses may be assessed on a full year rather than the last three months. Our guide how much can my business borrow? works through the logic with illustrative numbers.

Small business loans when credit is not perfect

Small business owners often carry the scars of a rough year on their personal credit file. Cash flow lenders consider defaults, arrears and ATO debt case by case and weigh them against recent trading. If your statements show a business that has been steady for the past six to twelve months, a past problem may matter less than you expect. See bad credit business loans for detail.

What it costs

We do not publish rates because every facility is priced on the business: its trading, credit, the amount, the term and any security. What you should compare is the total amount repayable, the fees, the repayment frequency and early payout terms. Use the repayment estimator to turn any quote into weekly and monthly figures. If two offers look similar, the one with clearer early payout terms and fewer add-on fees is often the better deal over the life of the loan, especially if you expect to repay ahead of schedule once a big invoice lands.

Before you borrow

A loan should solve a problem or fund an opportunity, not mask a business that loses money each month. Check your margins with the break-even calculator, size the actual gap with the cash flow gap calculator, and borrow what the job requires rather than the maximum on offer.

Common small business loan mistakes

• Borrowing a round number. Size the loan to the actual gap or purchase, plus a sensible buffer, not to whatever sounded comfortable.
• Using short money for long assets. A van that works for six years should not be funded over six months.
• Ignoring repayment frequency. Daily debits in a business paid monthly can create a gap of their own.
• Leaving out existing debts. Lenders see them in the statements anyway, and undisclosed debts slow everything down.
• Applying everywhere at once. Multiple applications can leave a trail of credit enquiries. One well-matched enquiry is better than ten random ones.
• Not reading the guarantee. Most unsecured small business loans include a personal guarantee. Understand it before you sign.

Talk to a real person

Small business owners are busy, so we keep the first step short: a 60-second enquiry, with no credit check to enquire and no blasting of your details to a panel of lenders. A specialist reads it and comes back with options that suit your business. Please fill it in accurately, especially your turnover and whether you own property, so the first answer is the right one. Apply now.