Choosing the right business loan can keep you in the game, or have you leading the pack. Business loans come in many forms, and the best fit depends on what the money is for, how your business trades and what security you can offer. So, whatever your plans, I’ll help you work out the right type of finance and the best way to get it in place. I arrange many business loans directly, and when a commercial finance specialist suits your situation better, I’ll refer you and explain why.
Looking to Expand Your Business?
For example, owners often look for finance for:
- Business working capital
- Buying a new business or franchise
- Buying or investing in commercial property
- Residential and commercial property development
- Equipment finance
Common Types of Business Loans
Secured Business Loans
A secured loan uses an asset as security, such as commercial property, equipment or, quite often, your home or an investment property. Because the lender carries less risk, secured business loans usually allow larger amounts and longer terms.
Unsecured Business Loans
An unsecured loan isn’t tied to a specific asset. Instead, the lender relies on your trading history, cash flow and usually a director’s guarantee. Amounts tend to be smaller and terms shorter.
Lines of Credit and Overdrafts
A line of credit or overdraft gives you a limit to draw on and repay as needed, so it suits uneven cash flow.
Invoice Finance
Invoice finance lets you borrow against money your customers already owe you. So, rather than waiting weeks for customers to pay, you can access part of that value sooner.
Equipment and Asset Finance
For vehicles, machinery, tools or technology, equipment and asset finance uses the item itself as security. That way, you spread the cost and keep your cash for running the business.
Commercial Property Loans
To buy a shop, office, warehouse or factory, a commercial property loan is the usual starting point. These loans often work differently to a home loan.
Working Capital
Working capital finance covers day-to-day costs such as wages, rent and stock. It might be a short-term loan, a line of credit or invoice finance, depending on the gap.
Secured or Unsecured: Weighing Up the Trade-Offs
Secured business loans generally cost less and let you borrow more. On the other hand, you put the asset at risk, including your home if you use it. Unsecured loans keep your property out of the picture. However, they usually cost more and often still need a personal guarantee. In the end, the right choice depends on the amount, the purpose and your comfort with risk.
What Lenders Assess for Business Loans
Every lender has its own policy, but most look at:
- Trading history: many lenders prefer at least one to two years
- ABN and GST: how long you have held your ABN and whether you hold GST registration
- Financial statements and BAS: profit and loss, balance sheets, tax returns and recent BAS
- Cash flow: whether the business can consistently meet repayments
- Security: what assets support the loan, if any
- Director guarantees: whether the directors will personally guarantee the debt
- Credit history: both the business and the owners’ personal credit files
Business finance also works under different rules to a home loan, so read the terms closely. The government’s business.gov.au finance hub also has useful general guidance.
Low-Doc Business Loan Options
If your financials aren’t up to date, some lenders offer low-doc options. Instead of full financial statements, they may accept recent BAS, business bank statements or an accountant’s declaration. That said, low-doc loans usually need stronger security and often cost more than full-doc loans.
How Business Debt Can Affect Your Home Loan
Business debt can reduce how much you can borrow personally. If you have guaranteed a business loan, some lenders count those repayments in a home loan assessment, while others don’t. This is one reason different banks give different borrowing capacities.
So, if you plan to buy or refinance soon, talk to me first, because the order can matter. For more, see self-employed home loans.
The Business Loan Process
I’ll walk you through each step, so you can find the right loan for your business and understand it before you sign.
Having a solid business plan is a key part of any business loan application. Banks and lenders will ask questions like “Why are you borrowing money?” or “What do you plan to do with it?”. I can help you set out your strategy and objectives clearly, so you can answer these questions with confidence.
This is where your credit history comes into play. First, we look at both your personal and business credit history. Once we know what we are working with, we can work together to paint your business in a favourable light.
Borrowing the maximum amount a lender will offer isn’t always the right move. Instead, we’ll look at your past financial statements and your cash flow forecasts to work out repayments your business can comfortably carry.
There are many different loan types to suit your business needs. I’ll help you understand the benefits and downfalls of secured or unsecured, variable or fixed-rate, and principal and interest or interest-only loans.
Once we’ve worked through these steps, you’re ready to apply, and I’ll help you get the right finance in place.
What to Prepare Before You Apply
Having your paperwork ready makes the process smoother. Generally, it helps to gather:
- Your ABN, business structure and GST details
- Two years of business and personal tax returns
- Recent financial statements and Business Activity Statements (BAS)
- Six to twelve months of business bank statements
- Details of existing debts and guarantees
- A short summary of what the funds are for, plus any quotes or contracts
Business Loans for Sutherland Shire Small Businesses
The Sutherland Shire runs on small business, from cafés in Cronulla to the trades and workshops of Taren Point, Caringbah and Kirrawee. As a Sutherland Shire mortgage broker based in Bangor, I know the local market, and I also help business owners across Australia by phone and video.
Before Ingram Financial, I ran a multi-site retail window furnishings business from 2016 to 2024, so I know cash flow pressure from the owner’s side. Also, it’s a good idea to talk to your accountant when planning any big financial decision for the business.
FAQs About Business Loans
Getting Started
Of course! Borrowing capacity refers to how much you can borrow from a lender. For a home loan estimate, try our How Much Can I Borrow calculator, or get in touch for an in-depth review.
I start by talking to you about what the money is for, your cash flow and any security you have. Then I’ll show you your options, listing the pros and cons of each, and ultimately we will come to a decision together.
Sometimes. Many lenders prefer one to two years of trading, but some will consider newer businesses, particularly with strong security or relevant industry experience.
Security and Loan Types
A secured loan has an asset behind it, such as property or equipment, so it usually allows larger amounts at a lower cost. In contrast, an unsecured loan is generally smaller and more expensive, and it often needs a personal guarantee.
Yes, some lenders still accept BAS, bank statements or an accountant’s declaration instead of full financials. However, these loans usually need stronger security and can cost more.
Business Loans and Your Home
Yes, many owners do, because it can lower the cost and increase the amount available. Even so, it puts your home at risk if the business can’t repay, so talk to your accountant first.
It can. Some lenders include guaranteed business debt in your home loan assessment, while others don’t. Read about self-employed home loans and talk to me before you apply for either.
Ready to talk about finance for your business? Book a free first chat, and we’ll work out your options together.
The information on this page is general in nature and does not take into account your objectives, financial situation or needs. Lending criteria, fees and charges apply. Consider whether it is appropriate for you and speak to us for advice specific to your situation. Speak to your accountant or tax adviser about tax.
Need Some Help?
Not sure where to start? That’s exactly what we’re here for. Drop us a message and we will get back to you within one business day with clear, honest advice tailored to your situation.