Best Small Business Loans Australia

Best Business Loans in Australia: In Detail

Learn more about our top-rated Australian finance providers below, where we present the pros and cons of each lender and compare their small business loan solutions.

Eligibility for an Unsecured Business Loan in Australia?

While many business owners hope for a situation in which they could find a magical “bad credit guaranteed approval loan“, the reality is that a business owner has to demonstrate they have been trading for a while (minimum 6 months) and that their financials are solid enough to meet the repayment schedule. Without this, it’s difficult to get a small business loan approved. This is particularly true for unsecured business loans.

Below is the criteria necessary in order to get a quick business loan approved, as demonstrated by 4 of the most prominent, and best, online business lenders in Australia.

To learn more about how Australia’s online lenders stack up against each other view this comprehensive guide in which we compare small business loans by product offering, credibility, compatibility, customer reviews and business loan interest rates.

Instant Algorithmic Matching

Quick Unsecured Business Loans: #1 Selling Point

There is not much that can be guaranteed about small business loans but one thing is for certain – if you were to apply with any of the recommended (best) business loan services, you can expect a speedy disbursement of funds. The 3 Qs are – Quick application process, Quick assessment (approval or rejection) and Quick payment.

When anyone applies to any of the recommended lenders through our website, they pass through Lend or Become, a business loan marketplace that makes this process even quicker. The expedited loan application process normally takes only 48h end to end.

Most lenders commit to a timeline of 48h to approval but are likely to act even faster, and will make payment within 24h of the loan being approved.

Education Centre: Small Business Loans FAQ

Learning More: Australia’s Online Lender Reviews

Prospa Review

Prospa, located in Darlinghurst, New South Wales, is the most respected small business loan provider in Australia – not only the best NSW lender but in all of Australia. With awards such as Winner – Excellence in Business Lending, FINNIES (2021/2020), Winner – FinTech Lender of the Year, MFAA Excellence Awards (2021/2020/2019) and #1 Financial Times 1000 High Growth Company 2018, 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 billions of dollars to over 90,000 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 positive customer reviews. With a 4.5 / 5 score on Google and a truly astonishing 4.9 / 5 on TrustPilot (based on over 7,000 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 found the ratio to positive reviews to be one of the best in  the financial services industry period.

Prospa is a great choice for anyone requiring an unsecured or secured business loan of $5,000 to $500,000. Prospa offers unsecured business loans for businesses with at least six months in operation.

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 financing 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 finance 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 320 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.

OnDeck Review

Ondeck is a global juggernaut offering SME loans 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 encourages customers to utilise loan comparison tools and check their credit score for free with OnDeck’s unique tool, 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 businesses and 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 whose offices are in Sydney. 

Now with over 800 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.

Shift Review

Shift (formerly GetCapital) is another of the leading online lenders in Australia, which has received numerous awards including the No.1 ranked lender by The Adviser for loans under $250k (2020), and the Deloitte Technology Fast 50 (2019/2018). With its straightforward approach, understandable website, and ultra-quick turnaround, Shift is considered “the friendliest lender”. Shift 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 400 Trustpilot reviews of which 99% are positive, there is an overwhelming majority of customers praising their experience with Shift.

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

MaxFunding Review

Max Funding rounds off our Top 5 most recommended providers for small business loans, targeting specifically bad credit businesses and secured lending.

It is one of the best known lenders, founded in 2011, and is still showing remarkable signs of innovation in each passing year. Max Funding keeps reinventing itself and diversifying its lending products, while improving its technology (including bank integration), all while offering a higher loan cap than any industry competitors ($1,000,000) at a minimum interest rate as low as 1.5%.

More Reviews, More Selection

At SmallBusinessLoansAustralia, we are committed to covering as much of the Australian online business lending industry as possible. We make a concise effort to update our business loan reviews – both in content and in online lender selection. We make a real effort to make an “under the hood” inspection and provide more insights than any of our competitors in Australia.

Other then the aforementioned brands listed in our top 10 best small business loans, we have also reviewed the following lenders and lending marketplaces:

Become Business Loans Review: One of Australia’s leading lending marketplaces, committed to offering prospective clients with multiple loan possibilities within minutes. Excellent client reviews. It has recently launched a new technology platform.

Bizcap Review: One of the best, and most liked, unsecured business finance providers in the market. Hundreds of positive reviews.

Speedy Finance Review: A known lender which was a finalist in the MFAA 2019 FinTech Lender Award, with 93% of its past clients rating it as “excellent”.

Captrove Review: Unsecured business loans of up to $60,000 with a no-frills website and coherent terms and conditions.

HomeSec Review: $20,000 to $2,000,000 in real-estate secured business loans.

Valiant Review: A marketplace with access to 25 Australian online lenders.

Sail Review: A lender focused on bad credit businesses – potentially ceased its operations in 2020. Same founder as Lumi.

Moula Review: Starting with a reasonably low interest of 0.75% of your current balance after 2 weeks, Moula is a good lender focused on good credit businesses.

Merchant Cash Review: Merchant Cash is an unsecured business loan marketplace working with 50 lenders and boasting a 97% approval rating.

BusinessLoans.com.au Review: An additional brand operated by the trustworthy GetCapital.

Bigstone Review: Working in Australia and South East Asia, Bigstone has raised massive funding from investors and generated a lot of media attention.

ThinCats Business Loan Review: One of a few P2P lenders in Australia. Very well known UK company.

Banjo Business Loan Review: A lender powered by modular technology and a streamlined process.

Skippr Review: Founded by two entrepreneurs with strong banking experience, Skippr is a new lender in Australia.

Marketlend Review: P2P solution for working capital and invoice financing.

Waddle Review: The biggest invoice-based financing option in Australia. Annual interest starts at 9.95%.

Fifo Capital Review: Fifo Capital specialises in invoice financing. NZ-founded. Operating in Australia as early as 2007, with 70 locations.

Kikka Capital Review: Funded by U.S loan giant Kabbage, Kikka Capital is a prominent Australian business lender operating since 2015, with an average score of 8.3/10 from past customers.

Judo Bank  Review: Judo Capital, now Judo Bank, offers unsecured and secured financing starting at 2.07%.

PayPal Working Capital Australia Review: Working capital loans for eCommerce clients by PayPal.

Amazon Lending Australia Review: Working capital loans for eCommerce clients by Amazon.

Business Loan Centre Australia Review: A small business loan marketplace in Australia.

Cash.com.au Review: One of Australia’s online lending marketplaces, no online reviews were found.

Funda Review: A small online lender based out of Newcastle focused only only on SME, no online reviews were found.

Limba Review: Operating for 20+ years with a close up and personal approach and 100% positive feedback from clients.

Capital Boost Review: A smaller than Lend small business marketplace in Australia with only 6 client reviews available online.

Australian small businesses have a lot of selection when it comes to borrowing money. This is not to say that business finance in Australia is highly accessible (we wrote an Op-Ed stating the exact opposite of that), but truth be told, Australian SME owners enjoy a large selection of business financing types made available to them.

Moneytech Review: One of the most diverse business loan solutions in Australia particularly for higher-value financing (up to $20,000,000).

ScotPac Review: One of best known business lenders in Australia, focused on invoice financing and operating since 1988.

Finport Finance: A very well known lender in the Trade Finance space offering loans up to $5m.

Unsecured Business Loans Types

• Bad Credit Business Loans
• Business Line of Credit
• SME Loan Guarantee Scheme Loan (Gov Funded, Temporary)
• Working Capital Finance
• Business Overdraft

Secured Business Loans Types

• Secured Business Loan (General Purpose)
• Asset Finance
• Construction Loans
• Equipment Loans
• Business Car Loans (inc. truck finance and fleet financing)
• Business Purchase Finance
• Fit-Out Finance
• Commercial Bridging Loan
• Caveat Loan and Business Mortgages
• Low Doc Business Loans

Additional Types of Financing

• Startup Financing
• Invoice Financing
• Business Loan Refinance
• Sole Trader Loans
• Novated Lease

General Overview of Loan Types & Interest Rate

Small Business Financing Throughout Australia

Region specific information is available in our localised guides.

Small Business Loans After the Covid Pandemic

Access to capital for Australian small businesses drastically dried up during the pandemic. Before the SME Loan Guarantee Scheme was announced, both banks and small business lenders (particularly those who issue unsecured business loans), rejected almost any application.

The SME Loan Guarantee scheme, the governmental programme for government-backed business loans,improved the situation for a portion of Australian SMEs. This scheme was replaced by the SME Recovery Loan Scheme – by and large the same initiative but allowing for a greater number of loan products, providing extended payment terms to SMEs and allowing funds borrowed through the scheme to be used for a wider range of business purposes. This further expanded the number of businesses eligible under the scheme but still left a large number of SMEs unable to access the finance required.

The good news is that now, as we get going in 2023, most of the unsecured business loan lenders in Australia have increased their loan approval ratings on standard unsecured business loans which are not issued under the Government scheme – once again making cash accessible to a greater number of SMEs. The bad news is that considering the RBA’s continuous interest rate hikes, these loans are more expensive than before and fewer businesses are interested in utilising them. 

The “new economy” in Australia and globally, consisting of high interest rates, high and persistent inflation, and recession fears, have changed the mindset of private consumers and small businesses on all financial decisions. Our survey has demonstrated that as many as 72% of businesses surveyed will struggle keeping up with the same spend rate in 2023 as in previous years.

Tax-friendly solutions like novated leases and particularly for electric cars (which are exempted from Fringe Benefit Tax below a certain price tag threshold) are growing in popularity as a result.

Read more with our detailed guides:

• Compare access to capital for SMEs between Australia and USA
• SME Recovery Loan Scheme [Ended June 30, 2022]
• Covid Financing and Grants
• Small Business Grants in Australia

Small Business Financing 101 – What to do when applying for a loan

Small business lending isn’t purely about finding the cheapest rate and quickest application process. There are considerations to be made prior to borrowing money.

Below are the 10 cordial rules 

• 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.

Choosing Between Banks and Online Lenders

• 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 should be 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 banks, you almost always need to present securities for the financing you will receive.
• With business financing companies, you would pay, on average, higher interest than with banks.
• 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 bank 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 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.

Bottom Line: Online SME Loans vs Banks

Use an online small business lender in Australia if –

• You require money urgently. Working capital financing or equipment financing qualify as an urgent need, a construction loan is more long term.
• 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 an Australian small business bank loan 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.

Choosing a Small Business Loan Lender With SBLA

We have reviewed more than 35 different Australia-based small business loan lenders, with a particular focus of our research on unsecured business loans. All of the lenders we have recommended are credible, effective, and offer quick application, quick decision and quick payment. Other similarities between the Australian non-bank funding providers include relatively high interest rates, strict minimum requirements, and quite conservative lending amounts. Leading online business lenders have become less risk averse in 2022 and 2023.

Getting a small business loan is a serious thing, and any prospective customer should conduct comprehensive research to decide which of the options is best suited to their requirements.

Proprietary information and research we have conducted

90% of SMEs anticipate challenges in FY23, with 42% citing fast-rising inflation as the biggest concern. Read more.

76% of SMEs expect cash flow impacts due to fast-growing interest rates and inflation. Read more.

72% of SMEs struggle to meet business costs now and will continue to do so in 2023, with petrol and business suppliers impacting the most. Read more.

64% of businesses have been negatively impacted by late payments, affecting cash flow and other financial aspects. Read more.

86% of SMEs are overspending on at least one expense, with insurance, utilities, and rent being the top areas. Read more.