5 types of business finance to grow your business in 2020

Tom Watson

19 Dec 2019

Growing business with help of business finance content

New year, new you. That’s how the saying goes, but it’s not a concept that just needs to be limited to your personal life. After all, why wouldn’t you want to get your business off to a great start in 2020 as well? 

Whether it’s grand plan expansion plans or simply improving cash flow, every business owner likely has a few ideas in their head about how they'd like to improve and grow their operations. 

Identifying opportunities to take your business to the next level is one thing, but coming up with the finance to execute your ideas is another matter. 

According to online business loans provider Lumi, the 2020 new year could be the perfect time to set your plans in motion though, and prime time to take out some extra funding if you need it. 

“Lumi understands the struggles of financing a business at the beginning of the year. As the bills continue to pile up, the amount of work often reduces and you're left strapped for cash flow over the month of January.” 

“Receiving finance at the start of the year relieves stress levels. Spreading payments throughout the year allows for a more flexible business plan, whether that's $30,000 to invest in marketing, giving your business the boost it needs as the year rolls out, or simply just a $5,000 investment in stock to capture your market audience in the initial stages of the year.” 

Thinking that some extra financial backing could make all the difference to your business, but wondering where to start?

While you may have heard about business loans before, there are also a number of other funding options available to Australian businesses, some of which may be better suited to your business's specific needs.   

So read on below for five types of business finance you’ll certainly want to consider in 2020.

Compare business loans

Rates updated daily. Advertiser disclosure.

  • Promoted

    Zip Business Capital

    Zip Business Capital

    Line of Credit

    On Application

    2% to 3%

    Instantly, once approved

  • Promoted



    Equipment Loan

    from 2.85% p.a.

    On Settlement

    48 Hours

  • Promoted



    Asset Finance

    On application

    $165.00* (Special Offer)


  • Promoted



    Invoice Finance

    On Application


    Same Day


There’s no other place to start than with standard business loans, after all, they tend to be the most popular type of finance for a reason. Business loans are one of the more flexible options available to Aussie businesses, and with loan amounts typically from as little as $5,000 up to $500,000 and beyond, plus loan periods from months to years, you’ll likely be able to find a loan to match your specific needs. 

“Business loans provide the ability to borrow money without having to sell a percentage of your business and the ability to use this money to spend on whatever you desire,” says Lumi. 

“As lenders, we ask how you plan on spending your money, but however it is used once the funds are received is up to you... provided you pay back the money of course!” 


A potential solution for businesses who are unable to take out a traditional business loan, a merchant cash advance is a lump sum payment that a business can receive from a lender upfront. 

The loan amount is then steadily paid off over time with the lender taking an agreed percentage of the business transactions, making it an alternative that actually matches a businesses cash flow. Just bear in mind that like other business finance solutions, lenders will charge a fee for the privilege.  


Maintaining a healthy cash flow can be a major hurdle for any small business, and receiving payments for invoices well behind schedule is one factor that makes it even more difficult. And given that it’s not uncommon for businesses to wait weeks for payment, invoice finance could be a handy solution. 

With invoice finance, businesses are able to receive a percentage of the invoice amount from a lender upfront (generally up to 95%), then the remaining portion of the funds once the invoice comes through - minus a fee or charge.         

“Invoice financing can be beneficial, similar to a line of credit, in that it allows ongoing access to funds. Invoice financing also offers immediate access to money,” says Lumi. 


Equipment loans are exactly what they sound like - a type of business loan which can be used to assist with purchasing items like farm and heavy equipment, vehicles like cars or vans and even office essentials like computers and printers.

Equipment finance loans are typically secured against the asset they’re being used to purchase, so you won’t be required to put up security of your own like you would with a secured business loan. However, if you do fail to meet your repayments the equipment could be repossessed.


Unlike a business loan, a business line of credit (or business overdraft) is a funding option that businesses can have at their disposal on an ongoing basis. That means that you can use it as a financial safeguard for your business which can be dipped into whenever needed, and you’ll only pay interest on the portion of the funds that you actually draw down on. 

“A line of credit is substantially more beneficial when it comes to home loans and renovations. It can increase a property's value significantly and can be used as a way to reduce the total interest paid on a home loan,” says Lumi. 

RELATED: Just getting started or are already in business? Here’s how a business loan can help

Ready to get started? Check out some of the hottest business loan offers (including Lumi’s business loan offer) in the table above, or for more options head over to the Mozo business loans comparison hub for a range of different loans from both online lenders and traditional banks.