Unsecured Business Loans

Whether you’re expanding your small business or need financial help, an unsecured business loan can get you the funds you need. Compare loans now and read on to learn more about how these flexible financing options can support your business’ growth without the need for collateral.

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Unsecured business loan comparisons on Mozo - last updated 31 May 2024

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  • Featured Product
    Boost Business Loan

    Whether you’re looking for a quick cash boost for your business or are ready to invest in growth, ScotPac offers a range of unsecured and secured loans from $10,000 up to $500,000. For loan terms of 6 months to 3 years. No application or account keeping fees to pay. Funds available in 24 hours or less once approved. Repayment options available.

    Interest Rate
    Upfront Fee
    Funding Speed
    On application
    Details on application
    From 24 hours
    Details
  • Business+ Unsecured Loan

    A simple way to fund your business’s big plans. Borrow up to $50,000 without using your assets as security. A fixed interest rate means your repayments don’t change over the life of the loan. Apply in minutes with the Business app. Enjoy a fast approval process. $495 establishment fee.

    Interest Rate
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    Rates range from 11.95% p.a. to 22.95% p.a.
    $495
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  • Unsecured Business Loan

    Business Loans from $5,000 to $5,000,000 with high approval rates. Access to funds on loans up to $500,000 in as little as 3 hours. Cash flow friendly repayments and open minded offers.

    Interest Rate
    Upfront Fee
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    3%, starting at $399
    from 3 hours
    Details
  • Unsecured Business Loan

    A straightforward business loan with no hidden Lumi fees or charges. Speedy application and approval process with fast access to funds according to Lumi.

    Interest Rate
    Upfront Fee
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    from 9%
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  • Prospa Plus Business Loan

    Prospa uses risk-based pricing to determine your interest rate. They look at factors including your industry, years in business, cash flow, creditworthiness and the overall financial health of your business.

    Interest Rate
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    Interest rates vary based on risk.
    3.5%
    from 24 hours
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  • 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 $12M.

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  • Business+ Unsecured Overdraft

    Manage the cash flow in your business with ease. Access up to $50,000 without using your assets as security. Lending criteria apply. Access your available limit from your linked Business+ Account. Use your Debit Mastercard for added convenience. Interest is charged on your balance owing, not your limit. Easy online application. $495 establishment fee.

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Unsecured business loans made easy

Whether your business is newly blossoming or you’ve been in the game for years, unsecured business loans open the door to expansion opportunities. Our goal is for you to secure a deal that combines a competitive interest rate with minimal fees, setting the stage for your business's prosperity. Utilise Mozo's intuitive comparison table above, featuring the latest rates and offers, to kickstart your search for the perfect loan.

What is an unsecured business loan?

An unsecured business loan lets your business borrow money without having to promise your assets, like buildings or equipment, as a guarantee.

One key thing about these loans is they're based on trust—how reliable your business looks to the lender, rather than what you can offer as security. Because there's no collateral, lenders see these loans as a bit riskier, which is why the interest rates might be higher.

Here are some key features of unsecured business loans in Australia:

Feature

Description

Interest rates

Expect them to be a tad higher since there’s no collateral. The exact rate you get can depend a lot on how solid your business looks financially to lenders.

Loan terms

How long you can borrow the money varies—some loans are short-term (a few months), while others can stretch up to seven years.

How much you can borrow

This can range quite a bit, from a few thousand dollars up to half a million, based on what the lender thinks your business can handle.

Getting the money fast

Many lenders get the funds to you quickly, sometimes within 24 hours after approval.

Paying It back

You've got options here too, from monthly to even daily payments, depending on what fits your business best.

Paying off early

Some loans let you pay back early without extra fees, which can save you on interest.

Redraw facility

Made too many payments? Some loans let you take that extra money back if you need it for something else.

Benefits and drawbacks of an unsecured loan

The ability to secure funding without having to put up collateral is only one of the benefits of an unsecured loan. However, there are also some drawbacks. That means deciding on the best financing path requires understanding all angles. Here's a breakdown of some of the major benefits and drawbacks of getting an unsecured loan.

Benefits

Drawbacks

No collateral needed. You don't need to secure the loan with assets like property or equipment.

Higher interest rates. Typically, these loans come with higher interest due to the greater risk.

Handy features. Access to early repayments and redraw facilities.

Smaller loan amounts. The available borrowing amount may be less than with secured loans.

Fast access to funds. Quick processing times mean you get the funds you need swiftly.

Shorter loan terms. You might find the repayment period is shorter compared to secured loans.

Better value for big moves. Opting for an unsecured loan can be wiser than using a credit card or dipping into savings for major business expansions.

Armed with this info, you're in a better position to judge whether an unsecured loan suits your business's financial strategy. 

Which banks offer unsecured business loans in Australia?

Here are a few banks that advertise unsecured business loans in Australia:

  • NAB

  • ANZ

  • Westpac

  • Great Southern Bank

How to Get an Unsecured Business Loan in Australia

Getting an unsecured business loan in Australia isn't rocket science, but there are a few boxes you'll need to tick. Here’s the process:

  1. Get clear on your needs. Figure out exactly how much cash you need and why - to expand, cover unexpected expenses, or just better manage cash flow during a slow period. Knowing your purpose helps.

  2. Check if you qualify. Most lenders want to see your business has been operating for a while and is bringing in decent revenue before lending. Make sure you meet their basic criteria.

  3. Gather documents. Pull together financial statements, proof of income, tax documents, etc. While you're at it, review your credit report too.

  4. Shop around for a loan. Look at loans from traditional banks but also online lenders. Compare rates, fees, terms carefully across multiple options. Don't just take the first offer.

  5. Apply when you find the right fit. Once you've compared and selected a lender, the application is pretty straightforward these days - most can be done online.

  6. Review and accept the agreement. If approved, go over that loan agreement thoroughly before signing to make sure you understand all the terms.

  7. Receive funds. The money should hit your account quickly after acceptance.

  8. Make repayments as scheduled. Stick to that repayment schedule like clockwork. If possible, pay a bit extra to minimise interest costs long-term.

Follow those basic steps, and you'll be well on your way to securing that unsecured business loan in Australia. Take the time to understand your needs, prepare properly, and shop smart for the right loan.

Are unsecured business loans safe?

Unsecured business loans are widely regarded as a safe option.Their main advantage is that you don't have to pledge your valuable assets, like property or equipment, as security for the loan. This keeps your major assets safe and out of any loan-related risks.

However, the trade-off for not providing collateral is often higher interest rates. That's why it's important to make sure you're okay with the loan's conditions, such as the interest rates and the repayment schedule, before committing.

How to compare unsecured business loans

Taking out a business loan is a major financial decision, so it’s important not to jump in too hastily. Here are some tips to help you compare your options so you’re able to land on the right deal for your business:

  • Understand all the expenses. Paying careful attention to the major expenses - like interest rates and fees - is a must when you’re comparing business loans, so make sure you weigh them all up to get a clear picture of the total cost of the loan.

  • Look into the features. Finding a great value deal is important, but features may be just as important to you. That’s why comparing a range of offers, and not just opting for the one with the lowest rate, could help you end up with a loan that really suits your needs.

  • Compare all your options. You may be familiar with business loans from major banks, but did you know about the emerging number of online lenders? Comparing offers from both will give you a greater choice of rates and handy features.

Are there other funding options?

An unsecured business loan isn’t going to be the best way to fund or pay for every business need, so it may also be worth considering:

  • Secured business loans: With (generally) lower rates, longer terms and larger possible loan amounts, a secured business loan could be a better fit for your business if you’re happy or to provide the required security.

  • Business credit cards: A business credit card could offer a more flexible and convenient way to manage your business cash flow and pay for smaller purchases than going through the loan process.

  • Business cash reserves: If you’ve got money sitting idly in your business bank account or business savings account then using it over a loan or credit card could be a smart way to avoid any unnecessary fees or interest.

More Unsecured Business Loans FAQs 

Still have some unresolved queries? To help you understand all the ins and outs of unsecured business loans, we’ve answered some of the frequently asked questions (FAQs) about them below. For an even more detailed run through of the whole business loans process, don't miss our ultimate guide on how to get a business loan.

How much money can I borrow with an unsecured business loan?

Most unsecured business loans range between $1000 and $500,000, though your limit will be determined by how your business does financially.

Factors that affect how much you can borrow include:

  • How long you’ve been in business: It’s unlikely you’ll be approved for an unsecured business loan if you’re in the early stages of your first business. Without prior evidence of good trading, a lender will struggle to assess whether your loan is a risk worth taking. A better option for a start-up business might be a secured loan.

  • Your average sales: A mature business that can provide evidence of good cash flow and a steady repayment history will be more likely to secure a larger lump sum than a new business. Don’t stress out if your monthly average sales have been low, your lender could consider your cashflow forecast in deciding how much you can borrow when approving your loan.

  • Your credit history: Unsecured business loans come from either banks or non-bank lenders. A business account with a high bank balance and no history of overdraws or exceeded credit limits will be looked upon more favourably than one with bad credit.

What can I use an unsecured business loan for?  

Small businesses can cost an arm and a leg to run and sometimes you just can’t predict when you’ll need extra cash flow. Typically, an unsecured business loan will bring the most benefit if the value of the loan outlasts the loan itself.

Here are some of the common ways Australian businesses use unsecured business loans to their advantage:  

  • Purchasing inventory. Inventory ranks as a significant outlay for small businesses. Whether you're looking to refresh your stock or grab a bulk purchase at a discount, a small unsecured business loan can be the swift financial boost you need.

  • Expanding your business. Feeling like your business is bursting at the seams? If you're in need of more space or want to expand operations, an unsecured business loan can offer the opportunity to grow, potentially increasing your profits.

  • Buying new equipment. For most businesses, acquiring new equipment to replace ageing items or to roll out new product lines is a part of staying competitive. While the idea of a self-serve soft serve machine might be appealing, prioritise equipment that directly supports your business's core operations—unless you're actually running an ice-creamery.

  • Hiring new staff. If you or your current team are overwhelmed with work, it might be time to consider expanding your workforce. Adding new staff members can lighten the load for everyone, and the boost in productivity could help in repaying your loan faster.

Tapping into an unsecured business loan could be just the boost your business needs to scale new heights.

I need a fast loan. Can I get that from an unsecured business loan?

Absolutely. Without assets to assess, most loans will only take 24 hours to a few business days to be approved. It’s important to keep in mind that just because an unsecured business loan is quick to access, doesn’t mean it’s the best option for you. If you can afford to wait or have collateral available, securing your loan can grant you lower interest rates. 

How much interest will I pay on my unsecured business loan?

High interest rates go hand-in-hand with high risk, meaning that unsecured business loans will often rack up higher costs than secured loans.

Here are some factors that affect your interest rate:

  • Your personal credit history: It’s not just your business’ finances that get caught up in the crossfire, your personal credit history could also impact the interest you’ll pay. If you’ve got bad credit, some lenders are likely to make up the risk of lending to you by jacking up interest rates. Don’t fret, you can always work on getting your credit score back on track before making an application.

  • Your loan amount and duration: As with any loan, the bigger your loan, the more you should expect to pay in interest. When it comes to the length of your loan term, shorter loans may mean you pay less interest overall, but the monthly repayments will be higher, and vice versa for longer loan terms. It’s better to be safe than sorry so pick a loan term that suits you, and don’t forget, if business is doing well, you may have the option of making extra repayments to pay your loan off quicker.

  • The RBA's cash rate. The Reserve Bank of Australia's (RBA) official cash rate directly impacts interest rates across the board, including unsecured business loans. When the RBA's rate goes up, loan interest rates tend to follow, affecting the cost of borrowing. Keeping an eye on these trends can give you insights into potential rate changes on your loan.

TOP TIP: Don’t forget about fees. It’s easy to be blinded by low headline interest rates when looking for a loan, so don’t forget to check if the lender has upfront or ongoing fees.

What flexible unsecured business loan features will I have access to?

The flexibility of an unsecured business loan will help put your heart (and bank account) at ease. Without assets on the chopping block you can stress less, and with a range of great flexible features your business can grow to its full potential.

Here are just a few benefits you may enjoy:

  • Flexible loan amount and repayment time: With an unsecured loan you have a wide range of loan options. If you need more time to pay off your loan, keep in mind you’ll be paying more in interest.  

  • Fast application and approval: Do you need money to appear in your bank account overnight? With unsecured business loans, this can become a reality. Depending on your case, your loan can be approved in the space of a few hours.

  • Extra repayments: Some lenders will allow you to make extra repayments on your loan so you can pay it off quicker. Check your terms and conditions to see what options you have available to you.

Where can I find the best interest rate for my unsecured business loan?

Right here! Scroll up to Mozo's business loan comparison hub for up-to-date rates and information on a great selection of banks and business lenders alike. Once you’ve found a lender that suits the needs of your business, click the blue ‘Go to site’ for more on what your options are or to start an application.