Best business loans in Australia at a glance
The right type of finance depends on what you're funding and how you expect to repay it.
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These options solve different funding needs. A business borrowing AUD $100,000 for machinery has a different financing requirement from one that needs AUD $20,000 to cover a temporary cash-flow gap.
How to compare business loans
Compare the features that affect both the cost and usefulness of the finance:
- Interest rate: The rate charged on the outstanding balance
- Total borrowing cost: Interest, establishment costs, ongoing fees, and other applicable charges
- Loan amount: The minimum and maximum you can apply for
- Loan term: How long you have to repay the borrowing
- Repayments: The amount, frequency, and structure of scheduled repayments
- Security: Whether property, equipment, or another asset must be offered as security
- Personal guarantees: Whether a business owner or another individual must guarantee the debt
- Eligibility: Requirements relating to business age, revenue, credit history, and other financial information
- Flexibility: Whether you can make extra repayments, redraw funds, or access a revolving facility
- Split loan facility: Whether you can divide the loan between fixed and variable interest rates
- Switch facility: Whether you can change between fixed and variable rate options during the loan term, and any conditions or fees that apply
- Portability: Whether you can keep the loan when relocating business premises, subject to the lender’s terms and approval
- Funding speed: How long the application, assessment, and funding process may take
A lower advertised rate isn't automatically the cheaper loan. Establishment fees, ongoing charges, the loan term, and repayment structure can all change the total amount your business pays.
What is a business loan in Australia?
A business loan is money a lender provides to a business, which the business repays over an agreed period with interest and any applicable fees.
The structure varies between products. You might receive a lump sum, access a revolving facility, or borrow specifically to purchase an asset.
Business finance is available through traditional banks, non-bank lenders, and specialist finance providers.
How business loans work
With a typical business term loan, the lender provides an agreed amount and the business repays it over a set period. Each repayment generally covers part of the principal and the interest charged on the outstanding balance.
When comparing a loan, look at:
- Loan amount: How much you borrow
- Interest rate: The price charged for using the lender's money
- Loan term: The period available to repay the debt
- Repayment schedule: How often repayments are made, such as weekly, fortnightly, or monthly
- Fees: Additional costs charged under the agreement
- Security: Assets or other guarantees supporting the loan
- Rate type: Whether the interest rate is fixed or variable
Unsecured business loans can still involve a personal guarantee, however, which may make an individual personally liable for the debt.
What can you use a business loan for?
Depending on the product, business finance can fund:
- Working capital
- Business expansion
- Equipment and machinery
- Stock or inventory
- Business vehicles
- Commercial property
- Business acquisition
- Refinancing existing business debt
A lender may restrict how certain finance can be used. Equipment finance, for example, is designed around an eligible asset rather than unrestricted working capital. Check the permitted use of funds before applying.
Types of business loans in Australia
Different forms of finance solve different business problems. The useful question isn't simply "Which loan is best?" but "Which type of finance matches the expense and repayment pattern?"
Small business loans
Small business loans Australia can fund working capital, expansion, equipment, stock, and other business expenses. A loan marketed specifically to small businesses isn't automatically the best fit. Compare the actual cost and repayment structure with other finance options available to you.
Secured business loans
A secured business loan is backed by an asset or other security. If the borrower defaults, the lender may have rights over the secured asset under the lending agreement.
Security can include:
- Property
- Vehicles
- Equipment
- Other business assets
- Certain financial assets
Because the lender has security backing the loan, secured finance may offer higher borrowing limits or lower pricing than comparable unsecured finance.
The trade-off is straightforward: the asset backing the loan is exposed if the business can't meet its obligations.
Unsecured business loans
Unsecured business loans in Australia generally don't require traditional collateral such as property or equipment.
They can suit businesses that don't want to pledge a particular asset or don't have suitable collateral. The trade-off can be higher pricing, lower borrowing limits, or shorter repayment periods.
Potential advantages include:
- No traditional asset security
- No need to pledge a specific business asset
- Potentially simpler applications for some products
Potential drawbacks include:
- Higher borrowing costs
- Lower borrowing limits
- Shorter repayment terms
Unsecured doesn't mean guarantee-free. A lender can still require a personal guarantee, which can create personal liability for the guarantor.
Startup business loans
Startup business loans Australia can be harder to obtain because a new business has little or no trading history to demonstrate how it has performed.
Lenders may instead place more weight on:
- The business plan
- Cash-flow forecasts
- Revenue projections
- Founder experience and financial information
- Available security
- Personal guarantees
- Customer contracts or other evidence of demand
For a startup, a clear plan for what the money will fund and how the business expects to repay it can matter as much as the amount requested.
If conventional business lending isn't available, founders can also consider grants, equity investment, asset finance, or other specialist funding.
Business lines of credit
A term loan gives you a lump sum upfront. A line of credit gives you an approved limit that you can draw from as required, subject to the facility's terms.
That difference matters when your cash requirement changes from month to month.
For example, a business with uneven working-capital needs may prefer access to an AUD $50,000 facility rather than taking an AUD $50,000 lump sum and paying interest on money it doesn't immediately need.
Interest is generally calculated on the amount drawn, although fees and pricing structures differ between products.
Equipment and asset finance
Equipment and asset finance is designed for businesses purchasing a specific asset, such as:
- Machinery
- Equipment
- Vehicles
- Other eligible business assets
The asset itself can form part of the lender's security arrangement.
Asset finance suits a purchase where the borrowing has a clear purpose and the asset is expected to generate value over several years. If you also need substantial working capital, however, asset finance may not address the entire funding requirement.
Invoice finance and other specialist business finance
Some businesses can use specialist finance tied directly to a particular transaction or asset.
Invoice finance provides funding against eligible unpaid invoices, helping a business access cash before customers pay. Trade finance can help fund certain trade-related transactions.
Commercial vehicle finance is designed specifically for eligible business vehicles. Specialist finance can work well when the product closely matches the underlying transaction. Compare the cost and conditions with a general-purpose facility rather than assuming specialized finance will always be cheaper.
How much does a business loan cost in Australia
The cost of a business loan comes from more than the interest rate. Your loan amount, term, repayment structure, fees, security, and the lender's assessment of the business can all affect the final cost.
Business loan interest rates in Australia
Business loan interest rates vary between lenders, products, and borrowers. As an indicative benchmark, the average interest rate on new small-business loans in Australia was 7.05% p.a. in June 2026, according to the Reserve Bank of Australia (RBA).
Pricing can be influenced by factors such as:
- Secured or unsecured structure
- Business trading history
- Revenue and cash flow
- Credit history
- Loan amount
- Loan term
- Loan purpose
- Security offered
An advertised rate isn't necessarily the rate you'll receive. Some lenders publish indicative pricing, while the final rate may be determined after assessing your application.
When comparing current rates, check the publication date and whether the figure is advertised, indicative, or personalized. A market average can provide context, but it isn't a guaranteed offer.
Business loan fees and charges
Fees can make a meaningful difference to the total cost of a loan.
Depending on the product, you may encounter:
- Application or establishment fees
- Account or ongoing fees
- Broker fees
- Early repayment fees
- Exit or break costs
- Late payment fees
- Other lender-specific charges
Include applicable fees in your comparison rather than looking at the interest rate alone.
Fixed vs variable business loan rates
A fixed-rate business loan keeps the interest rate unchanged for the period covered by the fixed-rate agreement. This can make repayments easier to predict.
A variable-rate loan can change when the applicable interest rate changes. Depending on the product, this can increase or reduce your interest costs and repayments.
Fixed rates can suit businesses that value repayment certainty. Variable rates can offer different features or flexibility, but check the specific terms before choosing.
How loan term affects your total cost
A longer loan term usually lowers the amount required for each scheduled repayment. The trade-off is that you're paying interest for a longer period.
For example, spreading the same borrowing over 5 years rather than 3 can make the regular repayment easier to manage, but may increase the total interest paid.
A shorter term can reduce the time you pay interest, but the higher regular repayment needs to fit comfortably within the business's cash flow.
Business loan calculator: Estimate your repayments
A business loan calculator Australia can help estimate repayments using inputs such as:
- Loan amount
- Interest rate
- Loan term
- Fees
- Repayment frequency
A useful calculator can show:
- Estimated repayment amount
- Total interest
- Total fees
- Total amount repaid
You can use our business loan calculator to estimate your repayments and understand the potential cost of your loan before you apply.
You can also use different scenarios to see how changing the loan term, amount, or rate affects the result. Use the calculation as a planning tool, not as a loan offer. Your actual rate, fees, and repayment structure depend on the approved finance.
How to choose the right business loan
Start with the business expense, then work backwards to the financing structure.
Do you need a business loan at all?
Before taking on debt, ask:
- What exactly will the money pay for?
- How much do you actually need?
- How quickly do you need it?
- What return or business benefit do you expect from the spending?
- Can the business comfortably make the repayments?
- What happens if revenue is lower than expected?
For example, borrowing to purchase equipment that increases productive capacity is different from borrowing to cover an ongoing cash shortfall. The first may have a clear connection to future revenue; the second could signal a deeper cash-flow problem that debt won't solve on its own.
Don't borrow simply because a lender has offered you a facility. Borrow when the purpose is clear, the cost makes sense, and the repayments are manageable.
Match the loan to your funding purpose
The financing structure should reflect what you're buying and how the money will be used.
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If you're financing a specific asset, start by looking at asset finance. If your need is recurring and unpredictable, flexibility may be more valuable than a lump sum.
Decide how much you need to borrow
Calculate the actual funding gap before looking at the maximum loan amount available.
Start with:
- What the money will fund
- The expected cost of that expense
- How much cash the business can contribute
- Any working-capital requirements during the repayment period
- Whether repayments remain manageable if revenue falls
- Whether you need a cash buffer after the borrowing
Avoid borrowing extra simply because you qualify for more. Every additional dollar borrowed increases the amount that must ultimately be repaid.
Secured vs unsecured: Which is better for your business?
Neither structure is universally better. The trade-off usually comes down to cost, borrowing capacity, flexibility, and the assets or guarantees you're willing to provide.
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If you have suitable assets and want to minimise borrowing costs, secured finance may be worth exploring. If avoiding collateral matters more, an unsecured facility may suit you even if it costs more.
Consider your business's age, revenue, and cash flow
Your financial profile affects both the products you can access and the terms a lender may offer.
Startups generally have less historical performance data, so forecasts, founder information, customer contracts, and available security can become more important. Young businesses have some trading history but may still have limited financial data.
Established businesses with consistent revenue may have a wider range of financing options. For a seasonal business, repayment timing deserves particular attention. A loan that looks affordable when annual revenue is averaged across the year can still create pressure during quieter months.
Consider repayment flexibility and funding speed
Look at the loan from the perspective of your day-to-day cash flow.
Check:
- When you need the money
- How often repayments are due
- Whether extra repayments are allowed
- Whether early repayment costs apply
- Whether redraw or revolving features are available
- What documents are required
- How long assessment and funding are expected to take
Don't choose a product solely because it advertises fast funding. A quick application is of little benefit if the repayment structure doesn't work for the business.
Compare the total cost, not just the interest rate
The cheapest-looking rate isn't necessarily the cheapest loan.
Compare:
Interest + establishment fees + ongoing fees + other applicable charges
Then consider the effect of the loan term and repayment structure.
A loan with a slightly higher rate but lower fees and a more suitable term could cost less overall than a loan advertised at a lower rate.
Business loan eligibility in Australia
Eligibility varies between lenders and products. There isn't a single business revenue figure, trading period, or credit score that guarantees approval across the Australian market.
What do lenders look at?
A lender may assess:
- Business revenue
- Cash flow
- Time in business
- Business credit history
- Personal credit history, where relevant
- Existing debts
- Loan purpose
- Available security
- Personal guarantees
- Ability to service the proposed debt
The central question is whether the business appears capable of meeting the proposed repayments without creating excessive financial pressure. Business.gov.au similarly recommends considering income, expenses, existing debts, cash flow, collateral, guarantors, and the ability to repay before applying.
What documents do you need for a business loan
Requirements vary by lender and product, so you may only need some of the following documents:
Common documents lenders may ask for
- Identification
- ABN and business details
- Business bank statements
- Financial statements
- Tax information
- Business plan
- Cash-flow forecasts
- Existing debt information
- Details of assets or proposed security
Having the likely documents ready can reduce delays during the application.
What startups can provide without trading history
A startup without established financial statements may instead provide:
- Business plan
- Cash-flow forecast
- Revenue projections
- Founder information
- Evidence of customer demand
- Contracts or purchase orders, where relevant
- Details of available security
- Other evidence supporting repayment capacity
The stronger the evidence behind the forecast, the easier it is for a lender to understand the proposed business model and funding requirement.
What to check before you accept a business loan
Getting approval isn't the final step. Read the offer and loan agreement carefully before accepting it.
Interest rate and total cost
Confirm the actual rate offered and calculate the expected total repayment, including applicable fees.
Fees and charges
Look for establishment, account, ongoing, broker, late-payment, early-repayment, exit, and other charges.
Loan term and repayments
Check the repayment amount, frequency, and final repayment date. Test the repayments against realistic cash-flow conditions, not just your strongest trading months.
Security and personal guarantees
Identify exactly which assets are being offered as security and whether you or another individual must provide a personal guarantee.
Early repayment and exit conditions
Find out whether you can repay the loan early and whether fees, break costs, or other charges apply.
Restrictions on how you can use the funds
Confirm that your intended spending is permitted under the agreement. Asset-specific and other specialist finance can have tighter restrictions than general-purpose borrowing.
Lender legitimacy and disclosures
Before providing financial information or signing an agreement, verify the lender's legal details and read its terms, conditions, and required disclosures. Business.gov.au recommends checking a lender's legitimacy and understanding the loan terms before proceeding.
How to apply for a business loan in Australia
A typical application can be approached in 8 steps.
1. Determine how much you need
Calculate the actual funding gap and identify exactly what the money will fund.
2. Check your eligibility and repayment capacity
Review revenue, cash flow, existing debt, and credit history before submitting applications.
3. Choose the right loan type
Match the finance to the expense. Equipment finance may suit a machinery purchase, while a line of credit may be better for recurring working-capital needs.
4. Compare lenders and loan costs
Compare the rate, fees, loan term, security requirements, repayment flexibility, and total cost. Also check that the lender is legitimate by verifying its Australian financial services or credit licence where applicable, checking its details on official registers, and reviewing its reputation and contact information before applying.
5. Prepare your documents
Gather the business, financial, and identification information the lender is likely to request.
6. Submit your application
Provide accurate information and respond quickly if the lender asks for additional documents.
7. Review the loan offer
Before signing, check the rate, fees, repayment amount, term, security, personal guarantees, and early repayment conditions.
8. Manage the borrowing
Once funded, include repayments in your cash-flow planning and track whether the finance is delivering the intended business benefit.
Banks vs non-bank lenders for business loans
Banks and non-bank lenders can both provide business finance, but they may differ in their products, eligibility criteria, documentation, and application processes.
Business loans from traditional banks
Banks can offer a broad range of business finance products and may be worth considering if you already have a banking relationship with one.
Potential advantages include:
- Broad product range
- Existing relationship and account history
- Established lending processes
- Access to multiple forms of finance
The application may also involve more documentation or security, particularly for larger or more complex borrowing.
Business loans from non-bank lenders
Non-bank lenders provide an alternative to traditional bank finance.
Depending on the provider, you may find:
- Different eligibility criteria
- Alternative documentation requirements
- Streamlined application processes
- Different repayment structures
- Different rates and fees
Speed can be an advantage for some products, but it shouldn't be the only factor in your decision. A faster loan can still be expensive or restrictive.
Which should you choose?
Focus on the offer rather than the lender label.
Compare:
- Total borrowing cost
- Repayment affordability
- Funding speed
- Flexibility
- Security requirements
- Eligibility
- Any existing relationship with the lender
The better choice is the finance that fits the business and remains affordable throughout the repayment period.
Alternatives to business loans
Debt isn't the only way to fund a business. In some situations, another source of funding can be a better fit.
Government grants
Government grants can provide eligible businesses with funding that doesn't usually need to be repaid, provided the grant conditions are met.
Grants typically have specific eligibility requirements, application processes, and restrictions on how the money can be used. Government funding isn't generally available simply because you're starting a business, so check the requirements for each program.
Equity investment
Equity investment provides capital in exchange for an ownership interest in the business.
There are no conventional loan repayments, but you give up part of the ownership and potentially future returns.
This can suit businesses pursuing significant growth where taking on additional debt isn't appropriate.
Business credit cards and lines of credit
Business credit cards and lines of credit can provide flexible access to funds for recurring or short-term expenses.
They can suit smaller working-capital requirements, but compare interest rates, fees, and repayment conditions before using them as an ongoing source of finance.
Supplier credit and other funding options
Supplier payment terms can give a business additional time to pay for stock or services. Equipment finance, invoice finance, and other specialist products can also solve specific funding problems.
The most suitable option is often the one that matches the timing and nature of the expense rather than the one offering the largest available facility.
When a business loan may not be the right choice
A business loan deserves a second look if:
- The business already struggles to meet existing obligations
- The borrowing would cover an ongoing cash shortfall with no clear improvement plan
- The expense has no clear business purpose
- The expected return is unlikely to justify the cost of finance
- The repayment would leave too little cash available for normal operations
Debt should support a business plan, not compensate indefinitely for a business model that isn't generating enough cash.
Frequently asked questions about business loans Australia
What is the best business loan in Australia?
The best business loan is the one that fits the expense, repayment capacity, and overall cost of borrowing. A term loan may suit a defined expansion project, while equipment finance, invoice finance, or a line of credit can better match specific funding needs.
Compare the actual offer rather than choosing solely on the advertised rate.
What is the easiest business loan to get in Australia?
There isn't one loan that's easiest for every business to obtain. Lenders can consider business age, revenue, cash flow, credit history, existing debt, security, and their own eligibility criteria.
A simpler application process doesn't necessarily mean easier approval.
Can I get a business loan as a startup?
Yes, some startups can obtain business finance, although limited trading history can make approval more difficult.
Lenders may rely more heavily on business plans, forecasts, founder information, expected revenue, customer contracts, security, and guarantees when historical business performance isn't available.
Can a sole trader get a business loan?
Yes, sole traders can apply for business finance. A lender may assess business income and expenses alongside relevant personal financial information because a sole trader and their business aren't separate legal entities.
What documents do I need for a business loan?
Common requirements include identification, ABN and business details, bank statements, financial information, tax information, and existing debt details.
Startups may also need business plans, forecasts, revenue projections, and information about the founders or expected customer revenue.
How long does a business loan take to get?
Funding times vary by product and lender. Some applications can be relatively streamlined, while larger or more complex borrowing can require additional documentation, credit assessment, or security checks.
If timing matters, ask the lender which stages could cause delays before submitting the application.
Can I get a business loan with bad credit?
It may be possible, but the available options can be more limited and borrowing may cost more.
A lender may consider current business revenue and cash flow alongside credit history, existing debts, security, and other aspects of the application.
Are business loan interest payments tax deductible?
Interest on business borrowing may be deductible when the borrowed funds are used for an income-producing business purpose, but the tax treatment depends on the circumstances.
This can become more complicated when borrowed funds are used for multiple purposes. Speak with a qualified Australian tax professional about your specific situation. The Australian Taxation Office's guidance confirms that the purpose and use of borrowed funds are relevant to interest deductibility.
Can I get a business loan without an ABN?
Whether you can get business finance without an ABN depends on the lender and the type of finance. Many Australian business finance products require business registration details, but requirements vary.
If you're still setting up the business, check the eligibility criteria for the finance you're considering and whether another funding option is more appropriate.
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