What counts as a business loan?
A business loan is money a lender advances to a business for a business purpose, repaid over an agreed period with interest and fees. That covers far more than the classic bank term loan. Paying a supplier, buying a ute, clearing a tax bill, fitting out a shop, bridging the gap until a property sells or simply smoothing out lumpy cash flow can each be funded by a different product, from a different kind of lender, on very different terms.
Because business credit is used mainly for business purposes, most of it sits outside the consumer rules that govern home loans and personal loans. In practice that means two things for borrowers. Lenders have more freedom to design products — daily repayments, factor-based pricing, caveats instead of mortgages — and there’s no compulsory comparison rate to line offers up. Understanding how each loan type works is the only reliable way to compare them.
The types of business loans, grouped by what backs them
The fastest way to narrow the field is to ask what the lender can rely on if things go wrong.
| Family | What backs it | Typical use | Start here |
|---|---|---|---|
| Unsecured and cash flow | Turnover, bank statements, a director’s guarantee | Stock, quiet months, short projects | Unsecured business loans |
| Secured term loans | Residential or commercial property | Larger amounts, longer terms | Secured business loans |
| Revolving facilities | Turnover or property equity | Recurring cash-flow gaps | Business line of credit |
| Asset finance | The equipment or vehicle itself | Machinery, trucks, utes, fit-outs | Equipment finance |
| Receivables finance | Unpaid invoices from business customers | B2B businesses waiting on terms | Invoice finance |
| Short-term property-backed | Equity behind an existing mortgage | Urgent needs with a clear exit | Caveat loans |
Security matters because it sets the ceiling. The RBA’s October 2025 Bulletin noted that unsecured lending has stayed below 5 per cent of SME credit, that roughly half of smaller SME loans rest on non-residential security like vehicles and equipment, and that new residentially secured loans average about four and a half times the size of the rest. Almost all business lending is secured by something, and property is what unlocks the bigger amounts. If you have equity, the doors to larger amounts and longer terms open. If you don’t, the cash-flow lenders and asset financiers are where most of the action is.
Choosing a business loan by term and purpose
Once you know what you can offer as security, match the loan’s length to the life of what it pays for. A short-term business loan suits stock you’ll sell in a few months; a long-term facility suits premises or a business you’ll own for a decade. Mismatching the two is one of the most common and expensive mistakes we see — funding a five-year asset with a six-month loan squeezes cash flow, while funding a seasonal stock build with a five-year loan means paying for money long after it has done its job.
- Day-to-day cash flow: working capital loans, lines of credit and overdrafts.
- A one-off purchase or project: business term loans, short-term loans or equipment finance.
- Paperwork that isn’t up to date: low doc business loans and no doc options, usually secured.
- Buying premises: commercial property loans.
- Large or specialist needs: large business loans, franchise finance, bridging finance and government-backed programs.
If you’re weighing up two or three of these, our business loan calculator compares offers by total cost in dollars and repayment comfort rather than headline numbers. When you’d rather have someone look at it with you, send a 60-second enquiry — there’s no credit check to ask.
What every lender will want to know
Whatever the loan type, the questions come back to the same handful. How long has the business traded, and what do the bank statements show? What security is on offer, and what is already owed against it? What does your credit file say, and is there any ATO debt? What exactly is the money for, and how will it be repaid? Our guide to business loan requirements covers each one, and the document checklist builder turns them into a list for your loan type.
The answers also decide which lender is the right door. Banks generally want two years of financials and clean credit; non-bank, private and online lenders cover more situations, usually at a higher cost for that flexibility. The lender directory explains what each type looks for.
Find the loan that fits, then the lender
Every guide in this hub explains one type of business loan: how it works, who it suits, what lenders ask for, what it really costs to compare and where it goes wrong. Start with the one closest to your situation, or let us do the sorting. A short enquiry goes to a real person who works out the loan type and the lender most likely to say yes; your details aren’t fired off to a crowd, and accurate answers mean we can match you properly first time. See if you qualify.