No Credit Check Business Loans Australia

Find out if you can take out a loan for your business without a credit check in Australia if you've struggled with credit.

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, updated on September 21st, 2023       

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Can my business access no credit check loans in Australia?

Yes – if your business is in a position to provide an asset as collateral, otherwise known as a secured business loan, you can have your application completed with minimal credit checks. This is because much of the risk of approving larger loan amounts is taken away by the loan security provided by your business, which may come in the form of equipment or machinery it owns or equity in either residential or commercial property. If your business were to default on the loan, for instance, the lender can fall back on recouping lost funds by selling the collateral, albeit as a last resort. 

Because of the lack of security they offer, your business won’t be able to qualify for an unsecured business loan without having a credit check conducted. These loans pose a greater risk to the lender, who instead relies upon a strong credit history as a significant factor in deciding whether your business is suitable to take on a loan. There are other factors at play, such as your business’ consistency of revenue generation, but having a bad credit score makes it much more difficult to be approved for unsecured financing. Your lender is also likely to conduct a personal check when applying for finance, so this will help inform their decision on whether to approve your business for funding.

What are the benefits of no credit check business loans?

There are a variety of significant benefits which may come about when opting for a secured business loan with no credit check in Australia, including:

Expanded borrowing power

Compared to unsecured business finance, business loans which come with collateral attached boast a far greater potential borrowing range. This is because the loan is largely tied to the value of your asset. While unsecured loans cap their borrowing power at around $500,000 no matter what, you may find your business is eligible to borrow well into the millions, if not tens of millions with some lenders.

Lower interest rates

The decreased level of risk is not only reflected in the lack of credit check but also the potential interest rates which can be offered. Your business can benefit from a marked difference in the rate offered on its loan compared to if no security was put up on the loan. Depending on the size of the loan you’re looking to take out and the period over which you’re hoping to repay it, this could end up saving you thousands of dollars.

Longer available loan terms

Additionally, you can take advantage of longer potential borrowing terms to ensure your business is comfortable in covering its loan debt on a regular basis. While unsecured terms range from three months to five years, adding security to your loan can enable you to repay your debt over as many as ten years. In doing so, you can space out your repayments more easily, making less of a dent in your business’ available cashflow, albeit longer terms will garner more interest overall.

How to increase your business’ chances of loan approval

More common questions about no credit check business loans in Australia

Are business loans available to those with no trading history?

Yes – although they’ll almost always require some form of credit check, there are lenders who can work with startup businesses who are yet to begin trading or new businesses with limited trading history. It’s important to note that your options for these loans are significantly more limited and they come with more restrictions around borrowing, such as capping loan amounts at around $30,000 and charging higher interest rates.

Can my bad credit startup get business loans with guaranteed approval in Australia?

No – there’s no such thing as a bad credit loan with guaranteed approval, nor is approval ever guaranteed for business loans. Every application is assessed by lenders, who take all different variables into account to determine whether your business is capable of comfortably servicing the loan and supporting its repayments. However, there are specialist lenders who can offer bad credit business loans for startups.

Can business loans with no credit check in Australia come with instant approval?

No – instant approval isn’t possible with business loans, as lenders always have to assess each application on its merits. Secured personal loans can be turned around in as little as 24 hours in some cases, although these can often take several days as lenders assess your business’ security. In contrast, unsecured financing is able to be approved and funded much more rapidly at a total of just three hours via certain lenders.

What can business loans be used for?

One of the main attractions of business loans to operators is that they can be used for just about anything you like, from fitting out your business’ interior to purchasing another business or franchise. In many cases, though, secured business loans are dedicated to the purchase of the asset used as collateral on the loan. For instance, if your restaurant business was buying an industrial freezer, this machinery would be used to secure the loan. This is also attainable with equipment finance.

Will I need to pay a deposit on my business loan?

No – business loans come without any requirement for a deposit to be made, so you can finance up to (or beyond) 100% of the cost of the expenses which need covering. However, your business can benefit from putting up some of its own funds towards its expenses, as this reduces the size of the loan and thus the overall cost of interest and fees which are charged. If your business is in a position to do so, it may end up saving a meaningful amount over your term.

Which factors affect my business’ borrowing power?

There are a number of factors which may affect your business’ borrowing power, including the following:

  • The value of the asset you provide
  • Your business’ monthly and annual revenue
  • How long your business has been trading
  • The industry your business operates in
  • Your intended purpose for the business funds
Do interest-free business loans exist?

Not really – there isn’t really such a thing as an interest-free business loan. The closest alternative to this would be a government grant for your business, such as New Business Assistance with NEIS or the CSIRO Kick-Start program. However, because of the qualification criteria for these loans often being stringent and the processes to get approved generally taking much longer, you may be better off simply taking out a regular business loan and using the funds freely.

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