Running a business can be incredibly liberating but it also creates a unique set of challenges. Whether you work solo or with a large team, you’ll undoubtedly need to make critical choices about the best places to invest your time, energy and money.

One of the biggest decisions you need to make is how to best manage your cashflow. Cashflow is one of the most critical factors to the success of any business and a stress factor for many Australian business owners. A business loan can help you navigate this and many other challenges you face as your business grows.

But how do you know what type of business loan is right for you? There are a lot of loan options available for businesses these days, which can make the process seem confusing. To get started, you’ll need to consider several factors including the size of your business, how long you’ve been running, your industry, financial health and more.

We want to help make your business loan decisions a little easier. That’s why we’ve compiled all of the most important information you need to know about business loans.

With the right information, you can then get your business on the fast track for success.

Most Popular Loans

Long Term Business Loan

This is likely what comes to mind when you think of business loans. A long term loan is a lump sum, plus interest that you repay in regular installments over a set period of time. It is typically paid over a time period of 12 months or longer but can run for as long as 30 years. Long term loans are available from traditional banks as well as online lenders.

Short Term Business Loan

Short term loans are similar to long term loans but are repaid over a shorter period of time, usually around 3 to 18 months. With a short term loan, businesses can access the capital they need more quickly, often within 24 hours. Businesses can also apply and receive approval more quickly as online lenders offer greater flexibility than traditional banks.

Business Line of Credit

A business line of credit enables you to borrow a certain amount of capital annually. The amount is typically based on accounts receivable and current inventory but usually less than $200,000. A business line of credit can be helpful in managing cash flow shortages but should not be used for long-term investments or major purchases.

Invoice Financing

Your unpaid invoices are valuable. Invoice financing enables you to use your outstanding invoices as collateral so that you can receive the money you need without waiting on overdue payments from your customers.

Equipment Financing

If you need to purchase expensive equipment, you can use it as collateral to get a loan and purchase it outright, without hurting your bottom line.

Merchant Cash Advance

With a merchant cash advance, a lender purchases a business’s future cash flow, so future transactions are used to repay the borrowed funds, in addition to a fee charged by the lender for the loan product.

Business Credit Card

Business credit cards work similarly to personal credit cards but are design for work spending.

Business Overdraft

A business overdraft allows a business to access more cash than they have available in their account to increase their cashflow. Overdrafts can offer an extra layer of protection for your business.

Business Microloan

Microloans are usually reserved for amounts smaller than term loans and have become a popular source of funding for startups.

Secured vs Unsecured Loans - What's the difference?

The most important thing to know about a loan is whether it is secured or unsecured. With a secured business loan, financing is secured by a valuable asset that you own (such as accounts receivable, a home or equipment) as collateral. With an unsecured loan, you are not required to provide an asset as collateral.

There are pros and cons to both loan types and knowing which one is right for your business depends on your individual circumstances and business goals. Here is a quick breakdown of the key differences:

	Secured Loans	Unsecured Loans
Collateral	Collateral required (see examples of what can be used)	No collateral required
Interest rates	Seen as less risky for lenders which means a lower interest rate, usually 2.5% to 13%.	Often higher than a secured loan, usually 7% to 30%.
Loan amounts	Higher loan amounts, could range from $250,000 to $50,000,000	Usually less than $50,000 but can be as high as $500,000
Loan terms	Typically, longer terms, 12 months to up to 30 years	Typically, shorter terms, 3 to 18 months
Approval Times	Stricter requirements, usually takes 3 to 4 weeks	Fast application, can be approved in as little as 24 hours
How applicants are assessed	Value of the asset used as collateral Credit history Cash flow history / projections Business plan Tax returns Other personal and business financials and more	Annual turnover Credit history Length of time in business Loan amount and purpose Other requirements depending on lender
Best for:	Established businesses Financing an expansion, renovations or businesses that are refinancing Businesses with strong credit history	Businesses that need funds quickly Businesses operating for less than two years Seasonal or high-volume, small dollar sales businesses Businesses with less-than-perfect credit history
Watch out for:	If you are unable to repay a secured loan, the lender can use the collateralised assets to recoup their losses. Some lenders include hidden fees or charge for early repayments	Higher interest rates Some lenders include hidden costs and fees Some lenders charge fees for early repayment

Loans per Business Type

Hospitality Business Loans

Running a hospitality business can be challenging. From purchasing additional equipment and paying staff wages, to ensuring you’re effectively marketing your company to attract new customers

Aboriginal & Indigenous Loans

Unique loan options, grants and other business support through government and private organisations available specifically to Aboriginal and Indigenous businesses

Startups Loans

There are many different funding option that may be available to startups, from traditional loans to investors and crowdfunding.

Professional Loans

Professional loans, also called industry-specific loans, are designed for the needs of businesses in certain industries.

What Loan Type Is Recommended for Me?

Long Term Loan
Established small business
Business financing an expansion or renovation
Business refinancing
Learn more about long term loans
Short Term Loan
Businesses who need fast funding
For accounts payable or inventory needs
A business who needs working capital or overcoming financial setbacks
Learn more about short term loans
Business Line of Credit
Businesses looking to build their credit
Who wants the flexibility of not having a set monthly payment
Businesses able to repay promptly as the interest and late fees compound quickly
Learn more about business line of credit
Invoice Financing
Businesses that are struggling with cash flow issues as a result of late payments.
For accounts payable or stock needs
Learn more about incoice financing
Equipment Financing
Businesses looking to invest in expensive and/or long term equipment
To improve operations or fast track growth.
Learn more about equipment financing
Merchant Cash Advance
Businesses such as retailers receiving a high proportion of payments via credit card or EFTPOS
Shops, cafés and restaurants or those struggling to manage cash flow
Learn more about merchant cash advance
Business Overdraft
Businesses who are looking for a bit of extra protection to ensure they don’t overdraw their account.
Learn more about business overdraft
Business Credit Card
Businesses of all shapes and sizes that have an ABN.
Businesses may also like to take advantage of credit card perks and loyalty programs.
Learn more about business credit card
Business Microloan
Entrepreneurs or those looking to launch and grow a small business
Covering start-up costs or other expenses.
Learn more about business microloans
Professional Loan
Professionals in specific industries
Covering costs and other expenses for physicians, dentists, attorneys, accountants, veterinarians and more
Learn more professional loans
Startup Loan
Startups that are looking to develop products or services
Launch or enter a new growth phase.
Learn more about startup loans
Aboriginal & Indigenous Loan
Aboriginal and Indigenous business owners
Learn more about Aboriginal and indigenous loans

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10 Mistakes Small Businesses Make on their Loan Application

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How to Write an Effective Business Plan

What’s the first thing that comes to mind when you think of a business plan? You might imagine a lengthy document that takes weeks to pull together or prevents you from focusing on your day-to-day responsibilities. The reality, however, is that creating a business plan isn’t nearly as daunting as it first seems.

Plan Your Business Expansion

One of the main reasons why SMEs seek a business loan is to assist with business expansion, and this trend doesn’t seem to be slowing down any time soon.

Transparent Pricing

Our pricing is fair, straight-forward and transparent. You can even use our calculator to find out your weekly loan repayments before you apply.

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