Secured Business Loans Australia: A Complete Guide

Attaining secured small business loans in Australia is much like the process for seeking unsecured small business loans. As well as the big four banks, there are a number of Online FinTech Lenders who will offer Secured Business Loans in Australia too.

In this complete guide we run through what secured business funding is, the best secured loans providers in Australia, the benefits and risks of taking secured business finance and bad credit secured business loans. We also compare secured business loans vs. unsecured business loans so readers can make an informed decision on which product is most suitable for their business requirements.

Types of Secured Business Loans

Loan TypeSecuritiesTermsAvg Loan SizeEstimated Interest Rate
Invoice FinanceInvoices3-180 days$10,0003%-5%
Merchant Cash AdvancePending Payments1-2 months$20,00015%-25%
Equipment FinanceEqupiment1-5 years$75,0006%-15%
Asset FinanceAsset1-7 years$100,0001.6%-15%
Secured LoanSecured1-10 years$100,0003%-12.5%

What is a Secured Business Loan?

A secured business loan is a loan secured by assets. Typically they are secured by valuable items that you own in your business. If, at a later point, you are not able to repay the loan, the lender has the right to sell the asset to get their money back.

Secured Loans Vs. Unsecured Loans

Secured Business Loans

  • Require personal or business assets to be used as collateral against the loan.
  • The amount you’re allowed to borrow will generally depend on the value of the assets.
  • Should be cheaper than taking an unsecured business loan.
  • Could allow you to borrow more as a business.
  • Will incur professional costs for having your asset valued.
  • Generally, will take longer than receiving an unsecured loan.

Unsecured Business Loans

  • Loans primarily based on business credit score and cash flow – no assets required.
  • Likely to be more expensive with less preferential rates when compared to a secured business loan.
  • May require a personal guarantee from a director.
  • Usually for a smaller loan amount and to be repaid over a smaller period of time.
  • Quick application and processing times.

Best Secured Loans Providers  in Australia

For the best secured loans in Australia – NSW, Queensland, or Melbourne based businesses are welcomed), there is no need to look any further than two of our top recommended providers here on small business loans Australia:

Prospa is our no.1 ranked provider for small business loans in Australia. It’s just about the most widely respected online lender to have launched in Australia in recent years, based around a strong foundation with its product offering and excellent customer service. As a general rule of thumb, any small business loan with Prospa over $100,000 AUD will be offered as a secured business loan.

  • Funding: $5,000 to $300,000
  • Recepient of multiple industry awards
  • Funding granted within 48h
  • 4.9 / 5 rating on TrustPilot
  • 20,000+ Australian Businesses Funded to date
  • ASX Traded Company
  • Clear T&C and repayments
  • Excellent website and onboarding
  • Had low approval rate between May-Aug 2020 due to COVID

OnDeck is one of the most established online lenders in the world. Since inception it has funded over US $12billion to small businesses, with loans ranging from $10,000 to $250,000 AUD. Although it’s not as heavily advertised, OnDeck will offer secured business lending, accepting a general variety of business assets. Speak to the experts at Become to learn more about a Secured Business Loan with OnDeck.

  • Great reputation in Australia and globally
  • 95% satisfaction from clients in Australia
  • Annual interest rate starts at 9.99%
  • Origination fee of 2.5% (lower than most lenders)
  • Traded in the NYSE
  • Application in 10 minutes
  • One of the best known lenders in the world
  • Not headquartered in Australia
  • Min $100,000 annual turnover


What can I use as Security in a Secured Business Loan?

The most common assets to utilisite for a secured business funding are typically commercial and residential property. But ultimately, any number of assets can be used as collateral providing the loan issuing company believes them to be of sufficient value. You could also use:


What are the Benefits of a Secured Business Loan?

Once you provide security for a business loan it means one thing – less risk for the lender. And with less risk, theoretically, you should get a better rate. If you have a reliable and growing business with regular cash flow then providing security can be a great way of reducing the amount you have to pay back. 

By providing security you may also be able to receive a higher loan amount than if you took an unsecured business loan. 


What Risks are Associated with a Secured Business Finance?

It may sound rather obvious but if you take a secured business loan and are unable to repay you risk losing the asset that you used as collateral in the loan. This could be particularly damaging for your business if it’s an integral piece of machinery or the business property. In some cases, if you’ve been able to use a personal vehicle or property then the impact isn’t just to your business either.

Better interest rates and a higher loan amount might certainly sound appealing, but as with any loan you should never borrow more than you can afford. Be aware of the total repayment costs at the onset of the loan.


Key Considerations Before Taking a Secured Business Loan

Just like when applying for an unsecured loan, businesses must be sure of what they are seeking from a lender when taking a secured business loan in Australia. Whether that be the breadth of lending solutions each lender offers, the reputation of the lender or the cheapest interest rate they are able to find. However, on top of this, there are a number of other considerations specifically relating to secured business lending:

  • The asset is the primary focus of the lender, so there will be less of an emphasis on your business’ cash flow and your business credit score. These will of course still count to some degree.
  • Any asset used as collateral for secured business lending should be professionally valued. You should be completely aware of its value, with your lender valuing it the same.
  • You don’t have to use personal assets as security and often there is no need. If you are to use a personal asset as security, you must understand in the worse case scenario what would happen if you lost this asset.


Bad Credit Secured Business Loans

If your business has a bad credit rating, then you will almost certainly not get the lowest and cheapest rate for your small business loan. This is because lenders will think it’s risky to lend to you. If your business has a poor credit history it can also be much more difficult to get the finance you need in the first place. Some lenders however could be more likely to consider lending to businesses with bad credit if security is provided. Be sure to understand each loan providers minimum criteria in the first instance to avoid wasting precious time and even more importantly, potentially damaging your credit score even further with a number of rejections. OnDeck, for example, requires a minimum credit score of at least 500, meaning some firms rated with a ‘poor’ credit score could still stand a chance of getting funded (Poor 0 – 509). Learn more about bad credit small business loans and business credit scores in Australia with our dedicated articles.



We hope you’ve enjoyed reading our guide to secured business loans Australia. Whilst ‘unsecured business loans’ have seen huge growth over the last two decades, it’s easy to forget that it is possible to provide security for your business loan, and with this, receive preferential loan terms in the process. It may not always be the right option for your business but we hope with the help of our balanced article it’s helped to provide you with a greater understanding as to whether secured business finance is the right option for your business. For any inaccuracies or simply for more information on secured business funding please do get in touch.