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Compare Business Loans

Looking for a loan to grow your business – without an interest rate or fees that'll cripple it? Mozo compares over 40 business loans from leading bank and non-bank lenders to help you find a great loan fit for your business needs.

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Business loan comparisons on Mozo - last updated 6 May 2021

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  • Featured Product
    Zip Business Trade

    Zip Business Trade from $1,000 to $3,000 interest free. Account fee is $12 per month, it is waived if you have zero balance. (T&Cs apply, see website for more details. Credit approval criteria, fees and charges apply.)

    Interest Rate
    Upfront Fee
    Funding speed
    0%
    $0
    Instantly, once approved
    Go to site
    Details
  • Unsecured Business Loan

    Business Loans from $5,000 to $600,000 with high approval rates. Access to funds in as little as 3 hours. Cash flow friendly repayments and open minded offers.

    Interest Rate
    Upfront Fee
    Funding speed
    On Application
    3%, starting at $399
    from 3 hours
    Go to site
    Details
  • ANZ Next Step Business Loan

    Enjoy a flexible business loan for up to $200,000. Apply in just 20 minutes online. Get fast conditional approval and get your funds in days. No assets required for approval. Apply now. Participating lender in the SME government guarantee scheme.

    Interest Rate
    Upfront Fee
    Funding speed
    from 4.24% p.a. variable
    No loan approval fee
    2 business days
    Go to site
    Details
  • Trade Finance

    Boost your purchasing power and access a flexible line of credit to pay suppliers in over 68 countries with Octet’s Trade Finance solution. Put your business in the driver’s seat with up to 120 day payment terms and up to 60 days interest free. We’ll custom-fit a Trade Finance facility based on your business needs from $200K to $7M.

    Interest Rate
    Upfront Fee
    Funding speed
    0% for the first 60 days, then rates starting from 6%
    On Application
    Instant on approval
    Go to site
    Details
  • Featured Product
    Line of Credit

    Zip Business Loans online application process can be completed in as little as five minutes, and once approved you can access the funds within 24 hours. A line of credit up to $500k that converts into a loan when you draw down. Participating lender in the SME government guarantee scheme.

    Interest Rate
    Upfront Fee
    Funding speed
    On Application
    2% to 3%
    Instantly, once approved
    Go to site
    Details
  • Short Term Business Loan

    Unsecured business loans from $10,000 - $250,000, over 6 to 24 months. Online application takes only 10 minutes and you'll know if you're approved within hours. Apply now. Participating lender in the SME government guarantee scheme.

    Interest Rate
    Upfront Fee
    Funding speed
    On Application
    3.00%
    from 24 Hours
    Go to site
    Details
  • Invoice Finance

    Get your customer invoices paid early, without waiting up to 90 days for payment. Apply online in 10 minutes and select your local or overseas invoices to fund. Flexible funding with no lock-in contract.

    Interest Rate
    Upfront Fee
    Funding speed
    On Application
    $0.00
    24 hours
    Go to site
    Details
  • Featured Product
    Zip Business Trade Plus

    Zip Business Trade Plus loans from $3,000 to $150,000, interest free loan. No account fees or interest. One-off 3% extension fee, split over 4 instalments. (T&Cs apply, see website for more details. Credit approval criteria, fees and charges apply.)

    Interest Rate
    Upfront Fee
    Funding speed
    0% for the first 60 days, 3% extension fee
    $0 for up to first 60 days
    Instantly, once approved
    Go to site
    Details
  • Hot DealSmall business loans with no repayments for the first 8 weeks. Offer ends 30 June. T&Cs apply.
    Business Loan

    Small business loans with no repayments for the first 8 weeks. Offer ends 30 June. T&Cs apply. Prospa uses risk-based pricing to determine your interest rate, which can range from 9.9% - 26.5% p.a. simple interest. They look at factors including your industry, years in business, cash flow, creditworthiness and the overall financial health of your business. Participating lender in the SME government guarantee scheme.

    Interest Rate
    Upfront Fee
    Funding speed
    Interest rates vary based on risk. Rates range from 9.90% to 26.50% p.a.
    3%
    from 24 hours
    Go to site
    Details
  • Invoice Finance

    Leave property out of the equation with ScotPac's Invoice Finance solution. Receive up to 95% of your debtors ledger with facilities ranging from $10K to over $100Mil.

    Interest Rate
    Upfront Fee
    Funding speed
    from 6.00% p.a.
    On Application
    from 24 hours
    Go to site
    Details
  • Invoice Finance

    Increase cashflow by unlocking the power of your receivables with Octet’s Invoice Finance solution. Receive up to 85% of your debtor’s ledger with tailored facilities ranging from $100K to $10M.

    Interest Rate
    Upfront Fee
    Funding speed
    0% for the first 60 days, then rates starting from 6%
    On Application
    Instant on approval
    Go to site
    Details
  • Business Loan

    Fast, flexible business loans from $10,000 to $200,000. Great for businesses which have been trading for more than 6 months with a monthly turnover above $10,000.

    Interest Rate
    Upfront Fee
    Funding speed
    On Application
    $0.00
    48 Hours
    Go to site
    Details
  • Business Loan

    Say goodbye to lengthy applications with online lender Moula. With a speedy 10 minute application process and potential funding within 24 hours, Moula can help you meet your businesses inventory or cash flow needs without the fuss. Participating lender in the SME government guarantee scheme.

    Interest Rate
    Upfront Fee
    Funding speed
    from 15.00% p.a.
    2.00%
    24 Hours
    Go to site
    Details

*Example cost figure provides indicative minimum total repayments over 6 months on a $10,000 loan. Actual costs will vary depending on individual risk score as assessed by the lender.

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.

Business Banking Resources

Reviews, news, tips and guides to help find the best business loan for you.

FAQ

Find the business loan that's right for you

Show transcript

If you’re running your own business, chances are you started with the dream of turning your passion into a career. But the reality for most means much more than just doing what you love to do. You end up wearing so many hats, and not all of them fit comfortably!

Some of the biggest business challenges can be maintaining consistent cash flow, ensuring invoices are paid on time, and investing for growth when most of your money may already be tied up in the business - that’s where a business loan could be helpful. But, there are lots of options to choose from. So, where do you find the business loan that’s right for you?

Well, Mozo, of course! Our Business Loan comparison table compares over 40 loans from leading bank and non-bank lenders to help you find a great loan fit for your business needs.

If it’s a smaller, short-term cash injection you need, say to cover overheads like stock and payroll, an unsecured loan could be worth a look. Or if you’re thinking a larger amount to help you invest in growing your business, and you have an asset for security, a secured loan offers lower rates and longer repayment terms. There are also more specialised products like equipment finance and overdraft facilities to help you manage and grow into the next phase of your business life.

It’s important to note that most lenders require a business to have at least some trading history. So, business loans may not be suitable for all businesses. But there are other products such as a business credit card, to help you help you get things moving.

Head to Mozo.com.au to find out how a business loan from a reputable lender could be just what your business needs to help realise it’s full potential.

What is a business loan?

A business loan is a type of loan that’s specifically used to help businesses grow, manage cashflow, make big purchases or simply meet their everyday running costs and needs. 

Like other loans, business loans can come with variable or fixed interest rates, they can be secured or unsecured, and usually, they'll come with some basic upfront or ongoing fees. Business loans also vary in size to cater for a whole range of different needs, with loans in the Mozo database ranging from thousands to millions of dollars in eligible borrowing.

So why do Australian businesses take out business loans? Starting or running a business often requires more funding than you might have stashed in your business bank account, which is why business loans can be a handy way to help grow and run your business.

What can business loans be used for? 

In Australia, you can use your business loan for all sorts of purposes, whether it’s to cover short-term cashflow gaps or to support longer-term investments. 

Some of the popular ways that businesses use loans in Australia include: 

  • Paying staff wages

  • Hiring new employees 

  • Purchasing stock

  • Buying new equipment

  • Paying invoices

  • Boosting day-to-day cashflow 

  • Funding growth opportunities.

Given that there are so many different reasons why a business might need extra finance, some lenders do offer a range of specialty business loans to meet specific funding needs. For instance, you’ll find financing for invoices, equipment financing, business lines of credit and even short term business loans, all of which can be compared in Mozo’s handy table above.

How do business loans work? 

Many lenders now promise online applications that take just minutes and funding approval in as little as 24 hours. And once the loan amount hits your bank account or drawdown facility, you’ll be able to begin using it for purposes like those listed above as quickly as you like. 

Generally speaking, business loans can either be a lump sum amount or a revolving line of credit borrowed and repaid over a set period of time. Just like a personal loan or home loan, you’ll be charged fees and an interest rate with a business loan - either a variable rate which can fluctuate over time with the market or a fixed rate which will stay the same over the life of the loan. However, business loan interest rates can be a bit different, as some of the fintech lenders offer fortnightly or monthly interest rates rather than the annual rates you may be used to. Other lenders may not disclose their rates until after you’ve applied, as the rates they offer customers are personalised and based on an evaluation of factors including your cashflow, credit history, financial situation and future plans. 

Finally, when it comes to paying off your loan, don’t be surprised if your lender requires more frequent repayments made on a daily, weekly or fortnightly basis rather than each month. That’s usually the case when the business loan has a much shorter maximum loan term of, say, a few months or years as opposed to the 25-30 years you’ll usually find with variable rate home loans.

How to compare business loans in Australia 

Finding the right loan for your business can be tricky, especially if you don’t know what to look out for. When you start to compare business loans, here are some of the key elements you’ll want to keep an eye out for.

Business loan interest rates and fees

As we’ve mentioned above, business loan interest rates work differently to consumer loan rates. The way each lender expresses rates may vary, which is why it’s important to keep a close eye on whether the interest rate is per fortnight, per month or per annum when comparing deals. Some lenders also don’t even offer interest rates upfront; instead, they'll calculate a unique rate for each business based upon their specific situation. 

The other cost you’ll want to compare closely are fees, so look out for the following: 

  • Application fees: This is a fee you’ll be charged at the start of your loan which can either come as a dollar figure or a percentage of the loan amount. 

  • Ongoing fees: Also known as a service fee, these can be charged on a weekly, monthly or annual basis.    

  • Early repayment fees: Some lenders may penalise you for the privilege of paying off your loan early, especially if it's a fixed rate loan. 

  • Dishonour fees: A dishonour fee may be charged if a due payment isn’t able to be processed because of a lack of funds in your account.

  • Late payment fee: This fee (usually $25-$50) is charged every time you miss a repayment. 

  • Discharge fee: Some lenders will charge a discharge fee once your loan is fully paid off, or in the event that you refinance your loan.

Business loan features

Aside from the actual costs of a loan, the other important aspect of business loans that you’ll want to compare are any useful features they come with.

  • Funding speed: Many lenders, especially the newer wave of online business loan providers, promise applications that can be filled out in as little as 5-10 minutes and funding that could be possible in just 24 hours. So if you’re in need of funds urgently, a speedy application and funding process could be a handy feature.   

  • Extra repayments: Having the ability to make extra repayments on your loan can help you pay off your debt faster, while also cutting down on the amount of interest you pay. Just remember that some lenders will charge you a fee to make extra repayments.

  • Redraw facility: If you do end up making extra repayments, a loan with a redraw facility could prove useful if you ever need to redraw any of those extra repayments to pay for unexpected bills or expenses.

  • Flexible repayments: Some business loan providers only offer one timeframe in which to make your repayments (daily, weekly, fortnightly or monthly). However, if you’d prefer to make repayments on a schedule that better suits your business cashflow, there are a number of providers that offer multiple options.

Luckily the Mozo business loan comparison table above makes all of this simple. You’ll be able to compare rates, fees and funding speed in a single glance, or you can hit the ‘details’ button for an even more comprehensive list of features for each loan.

What’s the best loan for your business?  

Besides fees and features, there are a bunch of other factors you’ll need to take into account when determining which loan is best for your business: 

  • How much your business wants to borrow: Each lender will offer varying minimum and maximum loan amounts, which could range from $5,000 all the way up to $1 million or more. So make sure you’ve picked a provider that caters for the amount you need, whether it’s a small $10,000 business loan or a much larger $100,000 business loan.

  • Your business cashflow: Depending on your cashflow, different finance types might suit you better. For instance, if you’re applying for a business loan to buy more stock or new equipment, then receiving a lump sum upfront may be a good option since you're clear on exactly how much you need to borrow. But if your cashflow is more unpredictable or you require cash injections on an ongoing basis, say, to pay staff or business invoices, then a line of credit (or business overdraft) could be a better fit. That’s because it gives borrowers more flexibility to access as little or as much finance as they need up to an approved limit, without having to pay interest on the remaining portion they don’t end up using. 

  • Your business life stage and revenue: Are you a startup or a much more established enterprise? How much revenue does your business generate every year? These are questions you’ll have to ask when comparing business loans, as many lenders will have eligibility criteria that require you to have been trading for a certain number of months or years, and have an annual turnover above a certain amount. That said, a number of non-bank lenders including ScotPac and Timelio do accept applications from newly established businesses. 

How to apply for a business loan 

Once you’ve found the best loan for your business, there are a few bits of information lenders will request from you before applying. Thankfully more and more business loan providers are making the application process as simple as possible with online applications that can be completed in 10 minutes or so, but you may still need to supply documents including:

  • Your driver’s licence to verify your identity 

  • Your business’s ABN (Australian Business Number) 

  • Financial documents such as bank account statements, tax returns and projected cash flow

  • A business plan for how you intend to use the funds.

Need some assistance? Mozo’s very own in-house business lending experts are here to help you find a business loan to match your needs. To get started, fill out a few simple details about yourself and the loan you’re after and then one of the experts will get in touch to give you a hand. 

Business Loan eligibility

Before you apply for a business loan, chances are you’ll want to know if you’ll be eligible for one at all. In the same way that there are certain lending criteria for personal loans and home loans, you’ll also need to meet some minimum requirements in order to be eligible for a business loan. Here are some of the factors that might influence whether or not you’ll qualify:  

Am I eligible for a business loan?

Time in business: Lenders will often require your business to have been in operation for a minimum amount of time before they’ll offer you a business loan, with many lenders in the Mozo database requiring a minimum trading time of anywhere from 6 months to 2 years.

Annual turnover: Lenders also want to ensure that your business is generating enough income to cover your business loan repayments, which is why they generally require a minimum annual turnover. The minimum turnover you’ll need will vary depending on the lender and the type of loan you’re looking at, but they can start anywhere from tens to hundreds of thousands of dollars. To prove your income, lenders may require evidence such as bank statements, financial statements and sales records. 

Personal and business record: Like all loans, lenders may look at both your personal and business credit history before offering you a business loan. That’s why it pays to maintain good credit health by paying off debt and avoiding things like exceeding credit limits or making late repayments. In addition, lenders may also check whether or not you’ve faced legal issues or had failed business ventures in the past. 

Outstanding tax: Like other credit history, an outstanding tax debt with the Australian Taxation Office (ATO) could impact your ability to take out a business loan. That includes any payment arrangement you may currently be in with the ATO to repay any existing tax debt.  

Loan purpose: Why do you want to borrow money? Is it to pay your staff, expand your operations or buy new machinery? While some business loans are more general and accommodate multiple needs, others (like equipment finance or agribusiness finance) may only accept businesses with very specific purposes or from a very specific sector.

Types of business loans and finance 

Just like businesses themselves, business loans come in all shapes and sizes. That means there is a range of different types of business loans you’ll be able to choose from to suit your individual needs, including secured and unsecured business loans, term loans and lines of credit, as well as more specialised loans for particular funding purposes.

Secured vs unsecured business loans 

Secured and unsecured business loans are two of the most common finance types you’ll come across, and there’s a simple (and unsurprising) difference between them.

Secured business loans are, as their name suggests, secured against an asset such as residential or commercial property, a vehicle, personal or business assets, or even against the business itself. Because there is collateral against the loan, secured business loans tend to come with more competitive rates and fees than unsecured business loans, as well as higher maximum loan values and longer loan periods. That could make them good for businesses which:

  • Are happy or able to provide an asset(s) as security

  • Need a larger loan amount

  • Can make repayments over a longer period.

On the other hand, unsecured business loans generally don’t require any security against them. But, because that means that the lender is taking on a greater risk, it does mean that they may come with higher interest rates and fees, and you might not be able to take out an unsecured loan quite as large as a secured one. Unsecured loans could be a good option for businesses which:

  • Are after a smaller amount, like a $10,000 business loan

  • Don’t have property or other assets to secure the loan.

Just bear in mind that unsecured business loans may require a personal guarantee. In other words, the business owner would be personally responsible for covering the debt if the business defaults.

Business term loans vs lines of credit

Standard business loans can be secured or unsecured, and cover a whole range of loan amounts and loan terms. But their defining feature is that all of the funding you apply for will go into your business bank account upon approval. That could make it good for businesses who: 

  • Know exactly how much they need to borrow 

  • Need to make a large one-off business purchase 

  • Have predictable long-term expenses.

Meanwhile, a line of credit gives you ongoing access to extra finance. Like a credit card, the lender approves your business for funds up to a credit limit, and you can withdraw any portion from your drawdown facility to use whenever you need. Unlike term loans where you would be charged interest on the whole loan, you won’t have to pay interest on any funds left untouched in the facility. That said, a fee may apply every time you withdraw money and you may also have to pay a line fee to keep the credit available for access. Lines of credit tend to suit businesses who: 

  • Unclear about how much they need to borrow

  • Want quick access to funding in case of any unexpected expenses 

  • Have an unpredictable cashflow.

Specialised business loans 

Specialised business loans

Australian businesses also have a number of other business loans available to them which can be used to solve specific funding needs. For instance:

Short term business loans: Generally available with terms from 3 months to 3 years, short term business loans could provide the quick cash injection that your business needs. For example, to cover the bills while waiting for an invoice to be paid.

Equipment finance business loans: Whether it’s updating a piece of equipment or purchasing a new vehicle, specialised equipment finance business loans can help fund those big-ticket purchases. Plus, the loan is generally secured against the asset itself.  

Invoice finance business loans: Managing cashflow can be one of the biggest headaches for Australian businesses, which is why an invoice finance business loan could be a handy way to access the money you’re owed through unpaid invoices, but earlier. This line of credit is often used by businesses with slow-paying business customers, such as suppliers or wholesalers. The loan is typically secured against the invoices themselves.

Trade finance business loans: Do you deal with international suppliers? Then you may be interested in a trade finance business loan, which operates as a line of credit to help you pay for your overseas supplier invoices without any delays. For exporters, this loan can close the gap between selling the product and receiving payment from the customer. Because you’ll be dealing in multiple currencies, it’s also important to make sure your lender offers a competitive foreign exchange rate

This copy also includes contributions from Tom Watson

Picture of Katherine O'Chee
Katherine O'Chee
Money writer

Katherine O’Chee is Mozo’s international money transfer and forex expert and business banking writer. She keeps Mozo’s readers on top of the latest news and writes in-depth features to inform and help Australians make smarter financial decisions. Her work has been published in major media outlets including Sydney Morning Herald, SBS News and Bangkok Post. She has a Bachelor of Arts (Media and Communications) from the University of Sydney. She is also ASIC RG146 (Tier 2) certified for general advice.

Your business loans FAQs, answered

Business loans may be a common funding solution, but if you’ve never taken one out before then it’s understandable if you’ve got a few questions about them. After all, in many ways they are quite different to consumer loans like car loans or home loans. So read on below for the quick fire answers to some of the most commonly asked business loans questions.

Is a fixed or variable interest rate better?

When you take out a business loan, you’ll get the option for either a fixed or variable rate option. There is no real answer as to which is the best type of rate, as both have benefits and catches. For instance:

  • Variable rate business loans can offer great flexibility such as fee free redraw facilities and the ability to make additional repayments. But if interest rates go up, so will your repayments, so it's important to budget for this possibility.

  • Fixed rate business loans increasingly offer similar features such as redraw and early repayments, but typically charge at a higher rate than variable business loans. Fixed rate business finance does give you the certainty to budget for repayments without worrying about interest rates changing.

Small business loans: Why is getting a good rate so important?

Having the right small business loan rate is incredibly important. A well managed cash flow is essential to the success of small business banking; you don’t want surprises like an unexpected interest rise damaging your business’s ability to make repayments.

By snagging a good business loan rate, you minimise the interest you pay on the loan. This leaves you with more funds to spend on training staff, updating your office or whatever else your business needs. Use our business loan comparison tool above to compare what features are available alongside your small business loan interest rate.

Who offers great business loan rates?

When it comes to finding the right business loan rate, you’ll generally have your choice of two types of lenders, a bank or a non-bank lender. Most lenders will have loans that are available Australia-wide, but if you want to find a lender in your capital city like Sydney or Melbourne, we have a page for you as well. Both lenders have their pros and cons and it’s up to you to decide which is right for your business.

Banks: One of the benefits of going with a big bank is that you’ll be able to go into a branch and speak to a manager. With a bank, there may also be more generous loan terms and amounts up for grabs; however this could mean that you have higher business bank loan rates and fees.

Non bank lenders: On the other hand, non-bank lenders, like online and peer-to-peer lenders, generally don’t charge higher rates and fees. But we should mention that peer-to-peer lenders often give better rates and lower fees to borrowers with a clean credit history. They may also have lower borrowing limits and shorter terms.

How much can I borrow?

That depends on a heap of different factors, including your business performance and credit history. You'll also need to decide how much you want to borrow - just because you qualify for a $100,000 business loan, doesn't mean it's necessarily right for your business needs at the moment.

Because each lender has slightly different criteria for how much they'll lend, it's definitely worth having a chat with the lender you choose before making an application.

Are there other options to fund my business?

While a business loan could prove a handy funding solution in many situations, there are a number of other alternatives that you could use for your own business.

  • Business credit cards: Using a business credit card to manage your cash flow and pay for smaller expenses could prove a more convenient option than taking out a loan. Of course this won’t be an option for every business, especially if you’re in need of a large amount of capital. But the added advantages of a credit card are that you won’t need to pay any interest if you use it responsibly and you will be able to accrue rewards points with your purchases.    
  • Business overdraft: A business overdraft is basically a line of credit that’s attached to a business bank account or debit card which allows a business to draw on funds beyond what they actually have in the account. An overdraft could be a convenient solution to managing your business’s cash flow, or just as a safety net in case you need access to some quick funds. While you’ll only pay interest on the money you draw upon, there are often a range of fees associated with overdrafts.

Can I use a business loan to start a business? 

That depends on the provider. While many lenders require their business customers to have been operating for a certain amount of time and earn a certain amount of revenue per year, there are a few exceptions like ScotPac and Octet that don’t have such conditions. You can visit our business loan providers page to check for yourself, or for more information, read our guide on business loans for startups.  

If I have bad credit, can I still be approved for a business loan?

While a less-than-spectacular credit score would make it harder for you to secure finance, there are still ways you could be approved for a business loan. For instance: 

  • Look for a specialist lender (like Bizcap) that welcomes businesses with bad credit or past defaults. Just bear in mind that because you could be considered a riskier borrower, you may be charged a higher interest rate than other customers with better credit scores. 

  • Take steps to improve your credit score, whether that’s paying all your bills on time or eliminating any outstanding personal or commercial debts.

What is the SME Loan Guarantee Scheme? Am I eligible? 

Business loans can be intimidating debt to take on, especially if you’re a relatively smaller or younger business. That’s why the government introduced a support measure known as the SME Loan Guarantee Scheme back in 2020 during the coronavirus pandemic, to help cut through the red tape and make the whole financing process easier and cheaper. 

As part of this scheme, the government is guaranteeing a portion of eligible business loans from participating lenders. So far three phases of the scheme have been rolled out (phase one has since expired), each with their own features and eligibility criteria. 

  • Under phase one (14 April 2020 - 30 September 2020), the government guaranteed half of all eligible three-year unsecured business loans of up to $250,000. Borrowers were also able to take a repayment holiday for the first six months, with interest capitalised. 

  • Under phase two (1 October 2020 - 30 June 2021), the government is continuing to guarantee half of all eligible business loans, but SMEs can now access much larger loans of up to $1 million over a longer period of five years. Phase two also includes secured loans (except if the collateral is commercial or residential property), and can be used for a broader range of funding purposes besides working capital, including to support investment. To be eligible, you’ll need to be a small to medium-sized business with a turnover of up to $50 million. SMEs that accessed loans under phase one can still apply for phase two loans.  

  • Under phase three (1 April 2021 - 31 December 2021), otherwise known as the SME Recovery Loan Scheme, the government is guaranteeing 80% of all eligible loans. The maximum loan amount and loan term has once again been extended, to $5 million over 10 years. Borrowers can also take repayment holidays of up to 24 months. Plus this version covers refinancing, allowing SMEs to switch to a better rate under the scheme. To be eligible, you’ll need to either be a SME with a turnover of up to $250 million that received JobKeeper payments between 4 January 2021 and 28 March 2021, or have been affected by the NSW floods in eligible Local Government Areas (LGAs) in March 2021. 

Do I need a guarantor for my business loan? 

That depends on your business situation. If you don’t have a hefty cash deposit or enough equity in your residential property to put up as security for your business loan, then having a guarantor is another way to help you get approved. Besides making it easier to access extra finance, a guarantor could also bring other benefits like increased borrowing power and better interest rates.

Your lender may request a guarantor in order to reduce risk to themselves and ensure the loan gets repaid. Guarantors have an obligation to pay back the whole debt if the business defaults. 

Guarantors can be first-party or third-party: the former simply means the borrower themselves provide security (i.e. a secured loan), while the latter means that another person or entity is brought into the loan agreement and agrees to put up an asset such as their residential property as security.

If you aren’t comfortable with either option but you still need a guarantor, then check to see if you qualify for the SME Loan Guarantee Scheme or the SME Recovery Scheme. For a limited time, the government is guaranteeing either 50% or 80% of all eligible loans (depending on which version you apply for). 

Can I take out a business loan without collateral? 

You sure can! If you apply for an unsecured business loan, then you won’t need to put up any assets as collateral. Just beware that in some cases where security isn’t required, there may be a condition that the business owner or executives must act as a personal guarantor to the loan. 

Can a business loan affect your personal finances? 

The short answer is, it can. 

When you apply for a business loan, the lender will typically access both your personal and business credit files to check whether or not you’re in the right financial position to service that loan. This is known as a ‘hard inquiry’ and it will leave a mark on your credit file. While one or two hard enquiries shouldn’t be much of a concern, having an excessive amount recorded within a short span of time could hurt your personal and business credit score. 

To avoid accumulating too many hard enquiries, here’s what you can do: 

  • Limit the number of new applications by shopping around and comparing business loans first

  • Be clear on the lender’s requirements before submitting your application, so you don’t get rejected for mistakes that could have been avoided 

  • Find ways to improve on your credit score such as paying your bills on time and clearing your debts. 

Where do I find a great business loan rate?

Right here! Our business loan comparison tool above can help you compare business loan interest rates today. It not only displays interest rates, but also fees and other loan features, helping you find a loan that suits your business’s needs.