Small Business Loans in Australia: A Guide
Are you a small business owner in need of financing? Are you fed up with stuck-up Australian banks that make you go through hoops get it?
Compare the best Australian small business lenders on SmallBusinessLoansAustralia.com – the ultimate guide for Australian small business owners looking elsewhere than the banks for business loans.
Stick around to learn all you need to know about small business financing solutions.
Step 1: Calculate How Likely Are You to Secure a Business Loan From an Online Lender
SME Loan Calculator (Click to Open)
Step 2: Discover The Best Small Business Loans 2017
Just Check Out Our Simple Comparison Below!
Before you rush to read our extensive small business lending options, you should consider using Lending Express. Test your eligibility in under 60 seconds, and get money in the bank in as little as 24 hours. Dealing with requests of $5,000 to $500,000.
Read Our Lending Express Review
Lender Reviews: How to do an effective business loan comparison?
We have put ourselves a target to compare and review some of the top lenders of this industry. Our goal is for prospective clients to be able to understand the type of service that is provided to them.
When you compare small business loans you have to remember this is not a one-fit-all situation. Different businesses have different needs and requirements. We are only able to provide the most basic considerations.
- Approved as a credit provider in Australia. That is the first consideration anyone should do before engaging in business with a lender.
- We prefer big and diverse companies that are able to offer various types of small and medium enterprises. That means there is a higher likeliness they would be able to offer you something that meets your own requirements.
- Quick and easy application process: if you come to this website you must have searched for a fast business loan. The first part of being quick is being able to receive all the information required online in a simple and intuitive form.
- Quick response to each application, followed by a quick financing (i.e. money in the bank). That is the second part of providing fast business financing.
- Easy tracking of your loan, and a clear repayment schedule. No hidden fees that you weren’t aware of and no fines on early repayments.
- A loan that can be taken for any business use (with the exception of SpotCap). For example, you can borrow funds from the lenders featured on this website to buy machinery, fix machinery, recruit staff, buy vehicles, buy stock, buy inventory or even acquire another company.
- A flexible loan amount that can suit a business that needs money to buy stock in the next day for $5,000, up to a more established firm that uses this loan to acquire a smaller competitor.
Based on the considerations above, we have made our selection in regards to the lenders we feature and review on this website. View our top selections here.
Step 4: Read Reviews
Australian Small Business Lender Reviews
Capify is a dinosaur in the small business lending industry. The firm was established 13 years ago and has lent more than $650m so far. It is partially funded by global giants like AliBaba which injected $40m in cash to be used for lending.
This is the company that actually pioneered unsecured business loans in Australia back in 2008, and it established itself as an industry leader.
The firm’s strong points, beyond its spotless reputation, is how quick they respond to applications (often as quickly as 60 minutes!), and how far the range of businesses they deal with goes. They would deal with large merchants or importers, but also smaller businesses such as family-owned stores and entrepreneurs.
The feedback from clients appears to be good. On Google Reviews, at the time of writing this, the firm boasts a 3.8 / 5 rating with more than 20 reviews. On the Australian TrustPilot, they are definitely leading the pack with a whooping 9.5 / 10 score with more than 140 reviews.
Capify is an established brand with serious capabilities in this industry and we would very much recommend inquiring with them. It does not cost you anything to try!
Prospa, located in Darlinghurst, New South Wales, is one of the most respectable alternative business lenders in Australia. With awards like Lending Innovator of the Year 2017, #1 Smart Company in Australia 2016, and most recently Leaders of the Year at FINNIES 2017, the firm is definitely recognised as such. The firm is trusted by Australian mortgage giant AFG and the two companies have signed on a collaboration initiative in 2015.
Aside from being one of the most trusted brands in the industry, the firm also offers a great deal of flexibility and have positioned themselves to be one of the quickest business lenders in Australia, and even globally. You’re likely to get a response to your application within hours!
Similarly to its main competitor, Capify, the service receives glorious feedback across the web. With 4.1 / 5 score on Google, 4.2 / 5 score on Facebook, and an astonishing 9.5 / 10 on TrustPilot (with more than 100 reviews), there is no doubt – Prospa is one of the best in what it does. When we searched online specifically for complaints, we could only locate 5 of those in total through all channels! This is extremely unique in the financial services industry.
Propsa is a great choice for anyone requiring a business loan of $5,000 to $250,000.
Sail is a newcomer to the group but, considering its young age, is showing remarkable signs of becoming a niche leader in the near future. The Sail group prides itself on a unique smart algorithm, that is able to identify the “real risk” profile better than its peers. Another things that Sail excels at is transparency. Sail small business loans are very easy to understand, and the only payment required upfront is 2.5% of the funding.
Sail’s loan range in between $5,000 – $100,000, for a minimum of 3 months and a maximum of a year. That means they cater to businesses that are interested in short-term loans only.
SpotCap is a global lender, which offers small business financing in the UK, The Netherlands, Spain, New Zealand and Australia (as of Jan ’17). From the get-go you get a sense of dealing with a sensible and fair company, as the repayment rates are completely transparent. This enables prospective customers to get a sense of the interest they will be paying based on their individual circumstances.
The firm was established in Berlin in 2014, and has grown at a staggering pace. It has raised more than $90m up to this point, and already employs 90 people across its offices around the globe. Spotcap is undoubtedly one of the best in the business.
Compare Now With Additional Reviews for Australian Business Financing:
Step 5: Master The Do’s and Don’ts Of Business Lending
There plenty words of cautionary tales for us to tell you about small business lending. If you thought financing was just a game, think again. Making a mistake in such a critical aspect of your business can be a make or break.
- Do not borrow money that you are unsure you can repay. The eventuality of this will become a real burden in your business career and personal life.
- Do not borrow money if you don’t need it. Consider other alternatives before jumping on a small business loan.
- Make an extensive research to understand your options. Don’t jump the gun unless you’re in a position you really have to.
- Realise that this industry works like this – the more urgently you need the funds, and the worse your position is (for example: bad credit), the interest rate will be higher.
- Realise this industry is not regulated in the same manner as personal loans. The regulatory authorities believe that as a business owner you’re in a much less vulnerable position than an individual, and should in theory, be more educated about these topics.
- Make a sober decision on whether to use banks or alternative business lenders to fund your business. Read the guide below destined to serve as a starting point for business loan newcomers.
For Business Loan Newcomers
We think the best way around is to start off by explaining how this industry works, and lay out and pros and cons of “alternative” small business loan against a bank business loan. Below are the differences you are going to experience dealing with the lenders listed on this website in comparison to Australian banks like Commonwealth, Westpac, ING, ANZ or Suncorp.
Comparing Australian Alternative Funding to Bank Loans
- With an alternative business lender, the decision on your loan would be made as early as within 24 hours of application. Much of the application processing is done online through a sophisticated algorithm.
- With small business alternative funding, the decision on whether to offer you a loan and under what conditions will rely from their independent analysis. They make factor in your credit score, but this is not the only determining factor. You will receive the loan quickly after the decision has been made (even in the same business day).
- With business financing companies, you should receive a clear repayment schedule with no hidden fees in the most simple and coherent way possible. There are no early repayment fines of any sort.
- With alternative lenders in Australia, you should be able to score an unsecured small business loan if you desire one (and speak to the right lender that offers such financing).
- With business financing companies you would pay, on average, higher interest than with banks.
- With business funding companies, you would be able to take a loan for a few months or 3 years maximum.
- With bank business loans, the decision on whether to give you a loan can take weeks. Even before that, it may consume a lot of time and energy (and money!) to create a suitable presentation of the business and fill out the application forms.
- With banks it is highly unlikely you will receive financing if you have a bad credit score. In fact, based on statistics as many as 60% of the loans are rejected due to either being unfit to the bank’s risk profile requirements or the business was misrepresented in the forms.
- With banks, the repayment schedule is not always clear, and you may experience fines on early repayments.
- With banks, you always need to present securities for the financing you will receive.
- With banks, you are expected to get better interest, on average, than with alternative providers.
- Banks prefer longer-term loans over short-terms, but can offer both.
Summary of Comparison: Banks Vs. Alternative Lenders
Use an alternative financing provider if:
- You require money urgently.
- OR You are not able to receive a business loan from the bank.
- OR You do not want to go through the hurdles of applying to a bank with all the preparations and paperwork involved.
- OR You need the money for a short period of time.
- OR You are looking for an unsecured loan.
Use a bank if:
- You are an established business that can get a loan with the bank.
- AND You are able to fill all the necessary paperwork.
- AND You are happy to wait weeks or even months for the application process to end.
- AND You can supply the necessary securities.