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 jump through hoops to get it? Compare the best small business loans in Australia with SmallBusinessLoansAustralia.com—the ultimate guide for Australian small business owners looking somewhere other than the banks for financing.

Stick around to learn all you need to know about small business financing solutions.

Can I get approved for business finance, and what are my best options?

Editorial Rating

97.0%

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If you want quick access to businesses financing, and have no particular lender of choice, use Become.co’s Smart Calculator which will find the most suitable options for you through its proprietary LendingScore™ algorithm.

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Discover The Best Small Business Loans 2020

The following are the best Australian SME lenders by our editorial rating. They all provide unsecured finance and small business loans with high approval rate, quick application processing, while providing clarity about the interest and repayment schedules.

#1 Best Rated on Small Business Loans Australia

Est. 2011

Editorial Rating

97.0%

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Loans size & Terms

$5,000 to $300,000

Unsecured Loans

Prospa Business Loans Review
#2 The Industry Veteran

Est. 2002

Editorial Rating

94.8%

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Loans size & Terms

$5,000 to $300,000

Unsecured Loans

Capify Business Funding Review
#3 Diverse Solutions for Established Businesses

Est. 2013

Editorial Rating

93.1%

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Loans size & Terms

$5,000 to $500,000

Secured and Unsecured Loans

GetCapital Review
#4 Bad Credit Businesses Specialist

Est. 2018

Editorial Rating

91.1%

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Loans size & Terms

$5,000 to $200,000

Unsecured Financing

Lumi Business Finance Review
#5 The Global Mega-Brand

Est. 2015

Editorial Rating

90.7%

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Loans size & Terms

$5,000 to $250,000

Secured and Unsecured Loans

OnDeck Review

Compare Unsecured Business Loans in Australia?

Learn about a swift and easy to use online platform to do all the legwork for you.

Before you rush to read our extensive small business lender reviews you should consider using Become SME Loans. Test your eligibility in under 60 seconds, receive only the most relevant loan options from 20 online lenders who deal specifically with small businesses, and offer money in the bank within 24 hours after the approval.

Lend.com.au deals with requests of $5,000 to $500,000 across Australia and the entire process is done online.

 

Visit Lend Business Finance

Read Our Lend.com.au Review

Compare Additional Business Financing

If have more specific requests or designations for the money you have borrowed, you may want to look at specific small business finance categories. While the majority of online lenders reviewed and featured on our website are flexible and lend out money for almost any purpose, there are certain lenders who specialise in certain types of loans.

Look below for the best small business loans in Australia by category:

Best Bad Credit Business Loans: View Australia’s best small business lenders who specialise in less-than-perfect credit scores.
Best Equipment Financing: View the best online lenders for equipment: medical equipment, heavy equipment, IT equipment, fitness equipment and more.
Best Commerical Consutrction Loans: The top online lenders who appeal to the consruction sector consisting of 360,000 businesses in Australia.
Best Working Capital Financing: View lenders offering short term capital loans with approval within hours from applying.
Best for Business Refinancing: View the best online lenders for refinancing exisiting debt.
Best for Fit Out Financing: Cafe, office, restaurant or shop fit out finance – these lenders are happy to lend money for these purposes.
Best for Invoice Financing: View lenders with invoice financing funcitonality – borrow money against your pending invoice’s value.
Best for Secured Financing: View Australia’s best lenders for borrowing money against securities.
Best for Partner Buyout Loans: If you are buying out your business parnter, there are specialist online lenders in Australia offering financing for that.

Unsecured Small Business Loans FAQ

  What the difference between online ledners and banks?

Banks are slow and cumbersome. Online lenders will grant you approval (or rejection) within 24h, and money could be in the bank even before. Banks like secured lending and the online lenders we recommend specialise in unsecured financing.

  What's the interest like?

Interest levels for small business loans by online lenders vary significantly. If your business is considered high-risk and that's why you are look for bank alternatives, you would be looking at high double-digit interest rate; if your business is healthy and you just need a quick bridging loan, then you may be looking at bank-like interest rates or slightly above that.

  How many lenders are there in Australia dealing with SME loans?

Quite a few lenders. We have reviewed more than 25 Australian online lenders and are aware of approximately 50 in existence which we plan reviewing. If we add in all the commercial banks, lenders who don't use online acquisition and brokers there are probably hundreds of options for SME loans in Australia.

  How big and reputable are your top rated lenders?

Prospa is large, a publically traded company, Capify are one of the industry's pineers starting as early as 2008, GetCapital has been recognised as one of the 50 fastest growing companies in tech by Deloitte’s, Become business loans and Lend.com.au has gained 99% positive reviews on TrustPilot... so yes, all of these companies are completely experienced and reliable .

Lender Reviews: How to do an effective business loan comparison?

We have set ourselves a target of comparing and reviewing some of the top non-bank business lenders in the Australian online lending industry. Our goal is for prospective clients to be able to understand the types of lending solutions and services that are provided to them by each online business loan provider in Australia and the lending criteria that makes a small business eligible to get funded.

When you compare small business loans, you have to remember this is not a one-size-fits-all solution. The same way business credit cards are different so too are the types of SME loans offered by online lenders. Different businesses have different needs and requirements ,so in this sense we are only able to provide the most basic considerations. However, through our relationship with Become and the online lenders we do gain a unique insight of the loan providers that are most relevant to certain industries and the providers that are better suited to good or bad credit businesses.

Determining Factors:

  • They are approved as a credit provider in Australia. That is the first thing anyone should consider before engaging in business with a lender.
  • We prefer big and diverse companies that are able to offer business loans to 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.
  • There is a quick and easy application process. If you have come to this website, you must have been searching 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 application.
  • There is a quick response to each application, followed by quick financing (i.e. money in the bank). That is the second part of providing fast business financing.
  • There is easy tracking of your loan and a clear repayment schedule with no hidden fees and no fines on early repayments.
  • A loan can be taken for any business use . 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 is offered that can suit a business that needs money to buy stock  the next day for $5,000, right through to a more established firm that uses a $500,000 loan to acquire a smaller competitor.

Read More about those Unsecured Business Lenders

Based on the considerations above, we have made our selection with regards to the lenders we feature and review on this website. View our top selections here.

 

Step 3: Manual Business Loan Comparison or Automated Finders?

Although our aim is to provide you with tools to learn about the best business financing providers in Australia, we did mention that there are a lot of factors involved in choosing the right provider for your own specific circumstances.

This is why we recommend using Become or Valiant, services that were built on the idea a smart algorithms can enable you find the financing you need and deserve, quickly. The only thing you need to do is fill in your details once and then receive offers from only the most relevant, approved business lenders. This is an especially useful tool if your business is newer or you have a bad credit score since only a smaller subset of lenders will accept such a business. But remember – there are no guaranteed approvals



Step 4: Read Reviews

Australian Small Business Lender Reviews

 

Capify Review

 

Capify is a dinosaur in the small business lending industry. The firm was established 17 years ago and has lent more than $650M so far in working capital financing. It is partially funded by global giants like Alibaba, who have 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 established itself as one of the industry leaders.

The firm’s strong point, beyond its spotless reputation, is how quickly it responds to applications (often as quickly as 60 minutes!) and the wide range of businesses it deals with. The firm will deal with large merchants or importers but also smaller businesses, such as family-owned stores and entrepreneurs.

The feedback from clients appears to be strong. On Google Reviews, at the time of writing this, Capify small business loans in Australia boasts a 4.5 / 5 rating with more than 120 reviews. On the Australian TrustPilot, it is one of the front runners in the Australian online lending industry with a whopping 4.8 / 5 score with more than 260 reviews.

 

Capify is an established brand with serious capabilities in this industry who  we certainly recommend at least making a free enquiry. It costs nothing and the application is simple and easy.

Expedited Loan Application

Capify Review – All Data

 

 

Prospa Review

Prospa, located in Darlinghurst, New South Wales, is the most respected alternative business lender in Australia. With awards such as Winner – FinTech Lender of the Year, MFAA Excellence Awards 2019, #5 Deloitte Technology Fast 50 Australia 2018, #1 Financial Times 1000 High Growth Company 2018 and Lending Innovator of the Year 2017, the firm is definitely recognised as such. Due to its tremendous growth Prospa is the first Australian lender to have registered on the ASX. As a result Prospa is completely transparent with its performance and lending metrics and even goes one step above by being the most transparent online lender with regards to its pricing. Unique to Prospa, their interest rate ranges for each product are clearly detailed on their website. Since inception, Prospa has funded over $1.2 billion to over 20,000 small businesses in Australia! 

Aside from being one of the most trusted brands in the industry, the firm also offers a great deal of flexibility and has positioned itself 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.

Prospa is in a league of its own when it comes to customer reviews. With a 4.7 / 5 score on Google and a truly astonishing 4.9 / 5 on TrustPilot (based on over 4,250 reviews!), there is no doubt that Prospa, in the eyes of the customer, is the best at what it does. When we searched online specifically for complaints, we could only locate two verified customers in total through all channels. This is extremely unique in the financial services industry.

Prospa is a great choice for anyone requiring an unsecured or secured business loan of $5,000 to $300,000. Prospa offers unsecured business loans for businesses with at least six months in operation.

Expedited Loan Application

Prospa Review – All Data

 

 

OnDeck Review

OnDeck Australia Logo

Ondeck is a global juggernaut  offering small business financing in America, Canada and Australia (as of 2015). From the start, 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. Ondeck also encourage customers to utilise loan comparison tools and get their free credit score so business owners can make an informed decision at the onset of receiving a small business loan.

The firm was established in 2007 and by 2014 had lent US $1billion to small businesses. Across all jurisdictions it operates, Ondeck has now funded over US $12 billion to small firms. Easily the largest in the online lending industry and shows the staggering pace it has grown in the last few years and since launching in Australia. It comes as no surprise as Ondeck is committed to serving customers with the smartest financing solutions and a world class service. 

In Australia the firm is also proud to partner with MYOB business software to offer customers various benefits and incentives through working with OnDeck Australia. 

Now with over 500 OnDeck Australia reviews on Trustpilot and a 4.8 / 5 Trust rating, Ondeck is cementing its place as one of the leading alternative business lenders in Australia.

Expedited Loan Application

OnDeck Review – All Data

 

 

GetCapital Review

GetCapital is another of the leading online lenders in Australia, which has received numerous awards including the Financial Review Fast 100 2018, and the Deloitte Technology Fast 50 2018.. With its straightforward approach, understandable website, and ultra-quick turnaround, Get Capital is considered “the friendliest lender”. GetCapital is known to be ultra flexible with the type of loans offered and in fact offers by far the greatest variety in working capital solutions of all of the best rated Australian online lenders. 

Boasting over 300 Trustpilot reviews of which 99% are positive, there is an overwhelming majority of customers praising their experience with GetCapital.

In essence, small businesses in Australia with at least $100,000 annual turnover can borrow money quickly and efficiently for any purpose. It may be a vehicle loan, equipment, line of credit, expansion-related or for any other purpose and needs. The guys at GetCapital will make sure it is apt for your business.

Expedited Loan Application

GetCapital Review – All Data

 

 

Lumi Review

Lumi rounds up our Top 5 most recommended providers. It  is a newcomer to the industry, but considering its young age,  is showing remarkable signs of becoming a niche leader in the near future. The Lumi group prides itself on a unique smart algorithm that is able to identify the ‘real risk’ profile better than its peers can. Another thing that Lumi excels at is transparency. Lumi  small business loans are very easy to understand, and the only payment required up front is a 2.5% establishment fee of the amount funded

Lumi’s loans range from $5,000 to $200,000 (unsecured up to $100,00), for a minimum of three months and a maximum of eighteen months. It caters best to businesses that are interested in short-term loans and is also one of the best rated for bad credit businesses.

Expedited Loan Application

Lumi Review – All Data

 

Compare Now With Additional Reviews for Australian Business Financing:

 Step 5: Master The Do’s and Don’ts of SME Financing in Australia

There are plenty of cautionary tales for us to tell you about small business lending. If you thought financing was purely about finding the cheapest rate , then it would be wise to think again. Making a mistake in such a critical aspect of your business can make or break you.

  • 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.
  • Do extensive research to understand your options. Don’t jump the gun unless you really have to.
  • Realise that the industry works like this: The more urgently you need the funds and the worse your position is (for example, bad credit) the higher the interest rate will be.
  • The commercial lending  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 about whether to use banks or alternative business lenders to fund your business. Read the guide below, which is intended as a starting point for business loan newcomers.

 

For Business Funding Newcomers

We think the best way is to start off by explaining how this industry works and to lay out the pros and cons of alternative (non-bank) small business loans against a bank business loan. Below are the differences you will experience when 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 is made within as little as 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 depend on their independent analysis. They may factor in your credit score, but this is not the only determining factor. You will receive the loan quickly once the decision has been made (even on the same business day).
  • With business financing companies, you should receive a clear repayment schedule with no hidden fees in the simplest and most 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 can take a loan for a few months or three 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 SME loans in Australia, 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 loans are rejected due to not meeting the bank’s risk profile requirements or because the business was misrepresented through the application.
  • 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-term loans but can offer both.

Summary of Comparison: Banks Vs. Non-Bank Lenders

Use a non-bank funding provider if:

  • You require money urgently. Working capital financing or equipment financing qualify as an urgent need.
  • You are not able to receive a business loan from the bank.
  • You do not want to go through the hurdles of applying to a bank with all the preparation and paperwork involved.
  • You need the money for only a short period of time.
  • You are looking for unsecured financing.

 

Use a bank if:

  • You are an established business that can get a loan with the bank.
  • You are able to complete all the necessary paperwork.
  • You are happy to wait weeks or even months for the application process to end.
  • You can supply the necessary securities.

Read more about the differences between applying for a bank loan and applying for a loan with an online lender here – online lenders vs bank loans.

Concluding Words on Unsecured Business Financing

We have reviewed more than 25 different Australia-based business loan opportunities, all of which offer unsecured small business loans. They are all credible, effective, and quick. Other similarities between the Australian non-bank funding companies include relatively high interest, strict minimum requirements, and small loan amounts in comparison to revenues (usually up to one month of revenues in financing). It is not an easy, cheap, and effort-free process to get a small business loan, and you should do  a comprehensive research to decide which of the SME finance lenders provide the best business loans for your needs.