Best Small Business Loans Comparison

Secured business loans generally come with lower interest rates, as there is less risk for the lender. A fixed-term loan could also come with a different interest rate than an ongoing line of credit.

For a secured loan, the asset being used as security will be considered. For example, for a business loan to purchase a vehicle, the age and condition of the asset will likely be taken into account. Newer assets that are in good condition will attract lower rates.

Businesses with a high level of annual turnover (e.g. $5m+) will qualify for lower business loan rates than a lower-turnover business.

Established businesses with a few years of trading history generally get lower rates than newer businesses. A minimum of 12 months' trading history is a common lender requirement.

Some lenders tailor their rates based on the industry the borrower operates in. As you’d expect, businesses in lower-risk industries often qualify for lower rates.

If the borrower providing a personal guarantee is asset-backed (i.e. owns a property), they’ll generally qualify for lower rates than a business borrower without assets.

With a lot of lenders, a credit score below 600 will make getting a business loan more difficult, with higher rates applying for low credit score borrowers who are approved.

If there are defaults, court orders or insolvencies in the borrower’s credit history, higher rates will likely apply. Likewise, if bank statements show the borrower has recent dishonoured payments or has been overdrawn on their account, this could impact the rate offered.

Borrowers with no outstanding ATO payments due will typically be offered lower business loan rates. If you are in arrears with the ATO but the payments are manageable you may still qualify but with a higher interest rate.

This isn’t always the case, but some lenders will vary rates based on the loan amount and duration of the loan. Again, the common theme is that greater risk means higher rates.

• ABR Finance
• Angle Finance
• ANZ
• APositive
• Australian Business Credit
• Australian Secure Capital Fund
• Azora Finance
• Banjo Loans
• Bizcap
• Business Fuel
• Butn
• Capify Australia
• Capital Finance
• CSA Private Mortgages
• Drive Finance Solution
• Dynamoney
• Earlypay
• Eastwood Securities
• Fifo Capita
• Finport Finance
• Finstro
• Fleet Partners
• Flexi Commercial
• Funda Business Finance
• Funding
• Fuzion Capital
• GRENKE
• Group And General
• HomeSec
• In Front Australian Business Solutions
• Invoice Money
• Lend Asset Assist
• Lumi
• Moneytech
• Morris Finance
• Moula
• Multipli
• Nova Cash Flow Finance
• Octet Finance
• Off Panel Lender
• Prospa
• Rentset
• Resimac
• ScotPac Business Finance
• Selfco
• Semper Asset Management
• Shift
• Speedy Finance
• Strive Financial
• TradePlus24
• TruePillars
• Westlawn
• Westpac
• Your Manager

Currently, small business loan interest rates in Australia range between 7.50-15% p.a. Interest rates will be higher for unsecured business loans. The average interest rate for business loans varies as there are multiple lenders and loan products available in the market. That’s why it’s important to compare your options to find the best rate for your business.

Here are the three main ways lenders will advertise — and apply — interest on business loans:

• Simple interest rate: Only shows the interest charged on the loan each year (or it’s sometimes charged monthly) as a percentage of the loan balance.
• APR (annual percentage rate): This is the total cost of borrowing (including interest and fees) expressed as an annual percentage.
• Factor rate: Often used on short-term loans. This is the interest rate on a loan presented in decimal form instead of a percentage.

Business loans generally come with standard fees, including:

• Establishment fees: $150 - $550
• Monthly account keeping fees: $0 - $10
• Extra repayment fees: Depends on loan amount & loan term
• Early payout fees: $0 - $450

Fees can significantly impact your borrowing costs, so consider negotiating with your lender to minimise them. Some lenders may even waive certain upfront fees to win your business.

Yes, you can use a finance broker to help you find the best rates on business loans and handle the application process for you, potentially increasing your chances of approval. That’s because:

• Brokers have established partnerships with a wide range of lenders
• They understand the specific eligibility criteria of lenders on their books
• They have experience handling business loan applications and can ensure yours meets the mark.

Finance brokers are typically paid as a percentage of your loan amount by the lender.

Yes, most business loan applications require submitting your latest bank statements for the business, usually as electronic copies. This is the quickest way for lenders to assess your business revenue and determine if you can comfortably repay the total loan amount and interest.

If you can’t provide business bank statements, you may have to apply for a low doc business loan, for which you’ll be asked to provide an accountant's letter verifying your business income.

The application process for a small business loan is typically faster with a specialist lender than with a bank lender. That’s because specialist online lenders have less stringent eligibility criteria and use technology to assess your business information, credit report, and bank transactions.

No, you generally don't need an upfront deposit for a business loan. But, there are instances when a lender may require a 10-20% deposit. This usually applies if your business has been trading for less than two years or if you don't own property and want to borrow more than $150,000.

It's important to note that a deposit is not the same as security (collateral), and you must provide collateral if applying for a secured business loan.

New businesses or startups can apply for a business loan, but typically face higher interest rates to offset the lender’s risk of financing a business with little or no trading history.

Remember that you must still be able to provide financial documentation showing you can service the loan in full. Alternatively, some lenders may request work contracts as proof of ongoing work to assess your loan serviceability.

Newer businesses generally need finance to plug gaps in their cash flow and help get their business off the ground.

Yes, you can still qualify for a business loan if you have a poor credit rating (or no credit rating), although it will likely need to be through a specialist lender. Bad credit business loans are similar to standard unsecured loans but usually feature higher interest rates.

In most cases, lenders will allow you to repay your loan early, although early termination fees may apply. If you plan on repaying your loan amount early to reduce your interest payable, check with your lender up-front whether you’ll incur fees or penalties for doing so.

Make sure that early termination fees on a business loan don't offset the interest savings you’d make by paying off the loan sooner.

Yes, you can generally refinance your business loan, although early termination fees may apply. Refinancing involves paying off your current business loan with a new one. You can refinance by getting a new loan from another lender or by switching your current loan with your current lender.

According to CPA Australia, common reasons why a business may choose to refinance include:

• To get a lower interest rate
• To borrow more money
• To consolidate debts

Be sure to check that the fees you’d pay in the refinancing process don’t cancel out the benefit (e.g. getting a lower interest rate) of refinancing in the first place.

There are a few reasons you may be declined for a small business loan, including:

• Your business financials don’t reflect your ability to service the loan amount.
• A business owner or director has bad credit or there’s no active credit history.
• Your business revenue is too dependent on a small number of customers.
• The outlook for your market sector or industry is poor.
• Your business hasn’t been operating for long enough.