The features and benefits of business loans
Business financing in Australia is versatile and can be taken out for small or large amounts, from as little as $5,000 all the way up to $500,000 with some lenders.
Thanks to a highly competitive market, you can benefit from lenders offering affordable interest rates and fees on their business loans to help you reduce the cost of financing.
Whether you need a short-term injection of funds or a more significant investment to be repaid over a longer term, you can structure your loan to suit your repayment needs.
You can secure the funds you need quickly, with easy online applications and money transferred in as soon as the same day you apply.
You’ll be able to compare business loan options without any penalties for completing your repayments ahead of schedule, enabling you to save on interest and fees.
The entire process is conducted over the internet, so you won’t need to worry about messy paperwork or in-office visits to your lender as part of receiving your funds.
Whether you need money to boost cashflow, help pay for your employees’ salaries or buy expensive equipment, a business loan can be used for just about any commercial purpose.
Types of business loan
The most common type of business finance, unsecured loans enable businesses to access the funds they need without attaching an asset to the loan as security. Some lenders may allow you to borrow up to $500,000 and, because there's no collateral, offer same-day approval.
If your business already owns valuable assets, such as property or expensive equipment, you may choose a secured business loan instead. These loans may increase your borrowing power beyond what an unsecured loan can offer and, crucially, typically come with lower interest rates.
Business loans don't always have to be worth hundreds of thousands. If you're operating a small business and need a boost to help you keep on top of your expenses or expand your company, you may be able to take out a loan starting from as little as $5,000 and unlock further capital.
Just because you don't have all the required documents for a standard business loan doesn't mean you're out of options. Low doc finance enables you to use alternative documentation, such as other business financials, in the application process to access the funds you need.
A commercial line of credit allows you to draw from your loan account whenever your business needs access to their funds, instead of managing a lump sum and repaying it like a regular loan. This can add flexibility to your finance arrangement, providing money when you need it.
Invoice finance presents another option to business operators looking to free up cash through outstanding invoices yet to be paid by their customers. Your invoice finance can either be invoice discounting or factoring, which present different options when it comes to your invoices.
A common reason for seeking out a loan is to purchase commercial equipment. You can do this either with an unsecured arrangement or one with the equipment itself as collateral, with the latter potentially increasing your borrowing power and lowering your interest rate.
With this finance, when your business purchases product, your supplier provides an invoice which you send to your financier and pledge to repay by a set date. From there, your supplier sells the invoice to your financier at a discounted rate, while you repay the full amount to your financier.
Under an inventory finance agreement, your lender pays your supplier directly for inventory, which allows it to be signed off and sent to you. From there, you can pay off your debt within a pre-determined period to your lender, which may be longer than the regular debtor period.
An overdraft facility is attached to an existing financial account belonging to your business, such as a transaction or savings account, and enables you to borrow up to a set limit after the account’s balance reaches zero. These overdrafts are repaid with interest, but only on what you use.
You may simply be in a position where your business needs a boost to its cash flow. If this is the case, there’s a range of stop-gap solutions which may be suitable for your situation, from standard unsecured loans to specialist cash flow loans, invoice finance or even an overdraft.
Why compare business loans through Savvy?
How to compare business loans
The interest that you’ll pay on your business loan will play a major role in forming the overall cost of financing. As such, you should always keep them front of mind when comparing different offers. For example, a $50,000 business loan over three years at a rate of 10% p.a. would cost you almost $850 more in interest overall than the same loan at 9% p.a. A low-rate business loan could save you thousands of dollars overall. You can make use of our business loan repayment calculator to see how much you could save.
Applying for a business loan
Common queries about business loans
Helpful business loan guides
Still looking for the right finance for your business?
Read up on a range of loans suited to different businesses with us to help you work out what your next step might be.