Business Loans
A business loan is a type of finance provided to a business for a commercial purpose such as starting, expanding, buying assets, improving cash flow, or purchasing property or equipment.
What Business Loan Options Are Out There?
Secured Business Loans
A secured business loan is a type of commercial finance where the borrower offers an asset as security (collateral) to the lender such as commercial property, residential property, business assets, equipment, or vehicles. Because the loan is backed by security, interest rates are lower, and borrowing capacity (LVR) is higher compared to unsecured lending.
Secured business loan is ideal for:
-
Business owners wanting better rates and higher borrowing limits
-
Borrowers willing to use property or assets to leverage funding
-
Startups, SMEs, and expanding businesses needing larger loan amounts
-
Borrowers wanting access to flexible structures like interest-only or revolving credit
Benefits
-
Lower interest rates
-
Higher loan amounts
-
Longer loan terms available
-
More lenders willing to approve
Considerations
-
Asset is at risk if repayments aren’t met
-
Valuation and legal fees may apply
-
More paperwork than unsecured funding
Unsecured Business Loans
An unsecured business loan is a type of commercial finance that does not require property or assets as security. Approval is usually based on the business’s revenue, cash flow, and trading history, rather than property equity. These loans are popular for fast funding, working capital, or short-term business needs.
Unsecured business loan is ideal for:
-
SMEs and small businesses needing quick access to funds
-
Businesses without property or assets to secure against a loan
-
Business owners wanting to avoid risking their home or commercial property
-
Companies needing a short-term working capital injection
Benefits
-
No property or asset security needed
-
Fast approval and funding turnaround
-
Minimal documentation — often just bank statements
-
Ideal for cash flow, marketing, stock purchases, or bridging expenses
Considerations
-
Higher interest rates than secured loans
-
Lower maximum loan amounts (based on revenue strength)
-
Shorter loan terms
Business Line of Credit
Business Line of Credit is a flexible financing facility that gives a business access to funds up to an approved limit, which can be drawn down as needed, similar to an overdraft or a credit card.
Instead of receiving the full loan amount upfront like a traditional loan, the business only uses what it needs — and only pays interest on the amount actually used, not the full credit limit.
A Business Line of Credit is ideal for:
-
Businesses with seasonal income or irregular cash flow
-
Companies waiting on invoice payments or debtor receivables
-
Growing businesses that need quick-access working capital
-
Operators who don't want a fixed-term loan commitment
Franchise Lending
Franchise lending is a type of business finance specifically designed to help individuals buy, establish, or expand a franchise business. Lenders assess these loans differently because franchises often come with established branding, operating systems, and proven revenue models, which can make them lower risk compared to independent start-ups.
A franchise is ideal for:
-
Franchise purchase fee or licensing fee
-
Buying an existing franchise (resale purchase)
Benefits of Franchise Lending
-
Easier approval if franchise is on a bank’s approved list
-
Can include fit-out, equipment, and setup costs in one loan
-
Tailored loan terms that match franchise cash flow structure
-
Lender confidence due to brand backing
Considerations
-
May still require personal guarantees or property security
-
Franchise fees and setup costs can be high
-
Borrower still responsible for performance, even under a known brand