Sydney Business Loans

Getting a business loan can be one of the best ways to take your business to the next level. Here at Mozo we compare Sydney business loans from banks and online business loan lenders, to help you get the best deal you can.


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Page last updated August 8, 2020

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Business Banking Resources

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

Sydney Business Loans comparison made easy

Looking to set the foundations for your new online business? Or maybe you want to
upgrade your company’s tech or office space? Whatever your KPIs are, you
may find yourself needing a financial boost in the form of a business loan.
We answered some of the more common questions about Sydney business
loans, to help you make a better informed business decision.

Am I eligible for a Sydney business loan?

Business loans have most of the same eligibility requirements as other loans, such as being an Australian citizen or permanent resident and being over 18. On top of this, most lenders will need to see that your business meets certain requirements, usually starting with a minimum turnover and proof of at least a year of operation.

You’ll also find every lender has its own specific list of things that they will ask you, such as what industry your business is in, what you intend to use the loan for and your business’ or personal credit score.

All this information will be used to determine if you are eligible for a loan and what sort of loan you can get.

What are the different types of business loans?

There a number of different business loans that a Sydney business can receive, all of which will having varying features, fees and benefits. For the most part, there are 3 types of business loans you should be aware of:

  • Instalment loans: The most common type of business loan you’ll find is the instalment loan. This follows the classic loan structure where you borrow a set amount of money and each fortnight or month, you pay back a set amount until you’ve repaid the loan completely.
  • Line-of-credit: A line-of-credit is a type of loan which is mostly associated with business lenders. It’s a fluid system used mainly for cash flow management. You can borrow freely, up to an agreed amount and only have to pay interest on what you borrow. Most of the time you’re able to borrow, pay off the loan, then borrow the money again. Line of credit loans are usually ongoing and fairly flexible.
  • Peer-to-peer: More and more peer-to-peer lending has emerged as a viable option for business loans in Sydney. While the actual loans will almost always function as instalment loans or line of credit loans, how you get the loan is different. When you sign up with a peer-to-peer lender, you get access to a business loans marketplace and receive loans from a specific investor or a group of investors.

What should I look for in a Sydney business loan?

That depends on you and your business. What you should be looking for comes down to what your business needs and what will help you manage your money more effectively. That said, there are some features that most people should look for:

  • The right type of loan: If you are looking for help managing your cash flow, then a line of credit loan might be right for you. If you’re looking for a lump sum to buy new equipment, then an instalment loan could be the better option. Whatever your situation is, you’ll want to pick the type of loan to match.
  • Low interest rates: As a general rule, the lower your business loan rates, the better. While low interest rates aren’t the be all and end all, loans with low interest rates will usually be more cost effective in the long run. So it’s definitely worth spending some time researching, comparing your options and finding a lender that can get you the best rate.
  • Low fees: Much like a low interest rate, a business loan with low fees will help you keep a lid on how much your business financing costs you. If you can find an option that has a good rate and only minimal fees, then you could end up paying a lot less than if you took the first Sydney business loan you saw.
  • The right loan period: A loan that fits in with your business’ timeline is crucial. Particularly with an instalment loan, the length of your loan term affects your monthly repayments and the total interest you pay over the life of the loan. A long loan term means lower monthly repayments, but you’ll pay more in interest long term and vice versa for a short loan term.

What business loans fees will I need to budget for?

Business loans often come with a few fees that you’ll need to be aware of before signing on the dotted line. So before you get a shock by some of the extra costs, here’s a list of some of the fees you might be up for:

  • Up front fees: When you first get your loan, it’s not unexpected to have to pay an upfront, one-time application or establishment fee. This is usually a flat fee, or a percentage of your loan.
  • Ongoing fees: Much like up front fees, ongoing fees can either be a flat rate, or a percentage of your business loan. They are usually also paid either weekly, monthly or annually.
  • Early repayment penalty: If business is booming, paying off your loan early can be a great way to save on interest. However, if you pay the whole thing off before your loan term ends, you may be up for an extra fee.Most of the time the fee will be higher the earlier you pay off your loan.
  • Drawdown fee: When you withdraw money from your line of credit loan, known as a drawdown, you may need to pay a percentage of that withdrawal or flat rate sum  as a fee.

These are the most common fees you are likely to see, but there are others that may apply to specific loans, so make sure you read the fine print to know just what you’re getting into.

Do I need collateral to take out a Sydney business loan?

Not necessarily. There are two types of business loan available, depending on whether or not you have any big assets to put up as security.

  • Unsecured loans: If you don’t have a house, car or brick and mortar store to use as security, an unsecured business loan might be the right option for you. Just keep in mind that unsecured loans usually come with higher interest rates.
  • Secured loans: If you do have an asset you can use for collateral, for example if you own your retail store, then a secured loan could be just the ticket. Because of the added security, these loans often come with lower interest rates.

I’m ready to get a Sydney business loan. Where do I start?

If you want some more information on an array of areas of the business loans process, you can check out our business loans guides, which contains everything from business loans application tips to the pros and cons of business overdrafts.

Then, before you start applying it’s important to spend some time comparing business loans to see which one might be best for you.

Business banking guides

Business banking news

SME Loan Guarantee Scheme extended to support small business recovery

As many small businesses struggle to find their footing in a COVID-safe economy, the federal government has stepped in with another lifeline: an expansion of its SME Loan Guarantee Scheme.Under the existing scheme, the government guarantees 50% of business loans issued by participating lenders to small to medium-sized enterprises (SMEs). This guarantee initially covered three-year unsecured loans of up to $250,000 and was set to end on 30 September 2020. But the latest move means SMEs can soon access much larger loans of up to $1 million via the scheme and repay them over a longer period of five years. This second phase will run from 1 October 2020 until 30 June 2021. In other words, it’s due to start a day after a number of government stimulus programs (including the cash flow boost and apprentice wage assistance) expires.Phase two will also include secured loans (except if the collateral is commercial or residential property), and apply to a broader range of funding purposes beyond working capital.Treasurer Josh Frydenberg said the expansion reflects a shift in the government’s focus from aiding businesses’ short-term survival to supporting their investment in the longer run as they emerge out of COVID-induced ‘hibernation’.It comes after recent research found over a quarter of SMEs see lack of available funding as their biggest barrier to innovating and growing for the rest of 2020.A total of 41 lenders are currently participating in the scheme, including the big four banks (ANZ, Commonwealth Bank, NAB, Westpac) as well as non-bank lenders such as GetCapital, OnDeck, Prospa and Spotcap. So far, uptake has been lower than expected, with 15,600 businesses getting their hands on loans worth $1.5 billion, compared to the planned $40 billion. But CommBank’s chief executive, Matt Comyn said the expanded scheme will play an important role in small business recovery in the months ahead.“It is clear from the challenges that we are currently facing in Victoria that the recovery will not be as smooth or quick as first thought, which is why it is essential we come up with creative solutions that offer small businesses in particular different ways to play their part in helping the country and Australians get back on their feet,” he said. “[The] lifting of the amount available to $1 million and the loan extension to five years will allow SMEs … to make the investments needed to get people back to work, create new jobs and lift confidence across the economy.” NAB’s chief executive, Ross McEwan also welcomed the expansion. He said the changes will make the scheme “available to more businesses, for longer, to help them rebuild - and support Australia’s recovery.” Looking for extra finance to pay your staff or buy new equipment? Get started with a few deals below, or jump over to our business loans comparison table for even more options.