Business Loans Australia
A business loan is funding provided to a business for purposes such as growth, stock, equipment or working capital. Loans may be secured by business assets or unsecured, with repayments structured over an agreed term. The structure, security and repayment schedule depend on the lender and the business's circumstances.
Every business reaches a point where external funding helps it move forward, whether that is taking on a new contract, buying stock, or smoothing out a seasonal dip in cash flow. The right business loan is the one that matches your purpose, your repayment capacity and your risk position. Gateway Asset Loans compares options across a panel of over 70 lenders to find a business loan suited to your circumstances.
How Do Business Loans Work?
A business loan provides a lump sum or a flexible facility that you draw on as needed. The funds are used for an agreed business purpose, such as purchasing stock, funding growth or covering operating costs.
Repayments are structured over a term that suits the purpose of the loan. A loan for stock might run over a shorter term, while a loan for a major expansion may run over several years. Your broker helps match the term to the purpose.
Business loans may be secured by business assets, such as equipment or property, or unsecured. Secured loans generally offer a more competitive structure because the lender holds an interest in an asset, while unsecured loans offer speed and flexibility.
What Assets Can You Finance?
Key Terms Explained
What is a secured versus unsecured business loan?
A secured business loan is backed by an asset, such as equipment or property, which the lender can claim if the loan is not repaid, while an unsecured business loan has no specific asset as security. Secured loans generally offer a more competitive structure, and unsecured loans offer speed and flexibility.
What is working capital finance?
Working capital finance is funding designed to cover the day to day operating costs of a business, such as stock, wages and supplier payments. It is usually structured as a flexible facility you draw on as needed, rather than a single lump sum, so funds are available when cash flow is tight.
What is a commercial hire purchase?
A commercial hire purchase is a facility where the lender buys the asset and hires it to the business over an agreed term, with ownership transferring to the business once the final payment is made. GST and tax treatment depends on your individual circumstances.
What is a balloon payment?
A balloon payment is a larger lump sum due at the end of a finance term, reducing the size of the regular repayments during the term. It can be paid in full, refinanced into a new facility, or settled by selling or trading the asset. Whether it suits you depends on your cash flow.
Finance Structures Compared
Business loans broadly fall into secured and unsecured categories. The comparison below outlines the key differences between the two.
| Structure | Who owns the asset | Balance sheet treatment | GST treatment | Best suited to |
|---|---|---|---|---|
| Secured Business Loan | You own any assets purchased | Loan and asset appear on the balance sheet | GST applies to any taxable purchases made | Businesses with assets to offer as security |
| Unsecured Business Loan | You own any assets purchased | Loan appears as a liability | GST applies to any taxable purchases made | Businesses wanting speed and no asset security |
| Line of Credit | You own any assets purchased | Drawn balance appears as a liability | GST applies to any taxable purchases made | Businesses wanting flexible, on demand funding |
| Overdraft | You own any assets purchased | Drawn balance appears as a liability | GST applies to any taxable purchases made | Businesses managing short term cash flow |
Tax treatment depends on your individual circumstances and should be confirmed with your accountant or tax adviser.
Who Can Apply for Business Loans Australia?
Why Use a Broker for Business Loans Australia?
Frequently Asked Questions
Do I need to provide security for a business loan?
Not always. Business loans can be secured by assets such as equipment or property, or unsecured. Unsecured loans are generally faster to arrange but may carry a different structure. Your broker outlines the security position for each option.
Can a new business without trading history get a loan?
It can be more challenging, but some lenders assist new businesses depending on the purpose, the directors' background and any security offered. A broker can identify lenders that are open to newer businesses and explain what they will need to see.
How long does it take to arrange a business loan?
Timeframes vary by lender and structure. Unsecured loans can often be arranged quickly, while secured loans may take longer due to valuations and documentation. Your broker gives you a realistic timeframe for each option up front.
Can I use a business loan for any purpose?
Most lenders want to understand the purpose of the funds. Common purposes include growth, stock, equipment and cash flow. Some lenders restrict how funds can be used, so it is best to be clear about your purpose with your broker from the start.
Can I repay a business loan early?
Many business loans allow early repayment, but some may include early repayment fees or break costs, particularly for fixed term facilities. Your broker explains the early repayment position for each option before you commit.
What documents will I need to apply?
Requirements vary by lender but commonly include identification, ABN details, recent financial statements or bank statements, and information about the loan purpose. Your broker provides a clear checklist so you can prepare everything in one go.
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Get a Quick QuoteFor further reading, see business.gov.au finance and capital guidance.