87 terms, A to Z
Business finance glossary
The words lenders, brokers and accountants use about business loans, explained in plain English for Australian owners. Each term links to the guide that goes deeper.
See if you qualify → No credit check to enquire
A
- ABN
- Australian Business Number: the 11-digit identifier for a business entity. Lenders use it to check how long the business has been registered and whether it is registered for GST. Read more
- ACN
- Australian Company Number: the nine-digit number ASIC issues to every company. When a company borrows, the ACN identifies the borrower on loan documents and security registrations.
- Aged debtors report
- A list of the money customers owe your business, sorted by how long each invoice has been outstanding. Invoice financiers use it to decide how much they will advance. Read more
- Amortisation
- The gradual repayment of a loan's principal through regular instalments. Early repayments carry more of the cost of finance; later ones mostly reduce the balance owing. Read more
- Approval in principle
- A lender's conditional indication that it is likely to lend, given before full checks such as a valuation or document verification. It is not a binding offer. Read more
- Asset finance
- Lending where the equipment, vehicle or machinery being bought is the main security. It includes chattel mortgages, finance leases and hire purchase. Read more
- ATO payment plan
- An arrangement with the Australian Taxation Office to pay a tax debt by instalments. Lenders generally view a debt on a plan that is being kept far more favourably than one with no arrangement. Read more
B
- Balloon payment
- A lump sum left owing at the end of a loan or lease to lower the regular repayments. It does not reduce the total cost; it moves part of it to the end of the term. Read more
- Bank guarantee
- A bank's promise to pay a third party, such as a landlord or supplier, if the business doesn't. It is usually backed by cash or property security and uses up borrowing capacity.
- BAS
- Business Activity Statement: the form a GST-registered business lodges with the ATO, usually quarterly. Lenders use recent BAS to confirm turnover, especially for low doc loans. Read more
- Break cost
- A fee some lenders charge when a fixed-term loan is repaid early, to cover what they lose by ending the arrangement. Always ask how it is calculated before you sign. Read more
- Bridging finance
- A short-term loan that covers a gap between needing money and receiving it, such as buying new premises before the old ones sell. Lenders focus heavily on the exit. Read more
- Broker
- An intermediary who arranges finance between a borrower and lenders. A good broker matches the file to the right lender; a poor one sends it everywhere. Read more
- Business credit report
- A credit bureau file on a company or business, showing enquiries, defaults, court actions and sometimes payment behaviour. Directors' personal files are usually checked too. Read more
- Business line of credit
- A facility with a set limit that a business can draw, repay and redraw. You generally pay for what you use, plus any line or account fees. Read more
- Business purpose declaration
- A signed statement that credit is wholly or predominantly for business purposes. It is one reason most business loans fall outside the National Credit Code.
C
- Cash flow
- The timing of money coming into and going out of a business. A profitable business can still run short of cash when customers pay slowly or costs fall due early. Read more
- Cash-flow lending
- Lending sized on a business's turnover and bank statements rather than on property. Most unsecured business loans are cash-flow loans. Read more
- Caveat
- A notice lodged on a property's title that warns of an interest in the land. Caveat lenders use one to protect a short-term loan without registering a full mortgage. Read more
- Caveat loan
- A short-term, property-backed business loan where the lender's interest is protected by a caveat on the title. It suits urgent needs with a clear plan to repay. Read more
- Chattel mortgage
- A common form of equipment and vehicle finance where the business owns the asset from day one and the lender takes security over it until the loan is repaid. Read more
- Collateral
- Another word for security: an asset the lender can claim if the loan isn't repaid. Property, vehicles, equipment and receivables are common forms. Read more
- Commercial property loan
- A loan to buy, refinance or draw equity from property used for business, such as shops, offices, warehouses or factories. Read more
- Comparison rate
- A consumer-loan measure combining interest and most fees into one figure. Business loans generally don't have to show one, so compare business offers by total cost in dollars. Read more
- Covenant
- A promise in a loan agreement, such as keeping a minimum level of profit or not taking on more debt without consent. Breaching a covenant can trigger a default.
- Credit enquiry
- A record on your credit file that a lender has checked it in response to an application. Several enquiries in a short time can make the next lender cautious. Read more
- Credit policy
- A lender's internal rules on who and what it will lend to: minimum trading time, acceptable industries, security, documents and credit history.
D
- Debt consolidation
- Replacing several debts with one new facility, often to lower the total repayment or simplify cash flow. It works best when the new structure costs less overall. Read more
- Debtor finance
- Another name for invoice finance: borrowing against the money customers owe your business. Read more
- Default
- Failing to meet a loan obligation, such as a missed repayment or a broken covenant. A listed default is a record of an overdue debt on a credit file. Read more
- Director's guarantee
- A director's personal promise to repay a company's debt if the company can't. Most business loans to companies and trusts require one. Read more
- Drawdown
- Taking funds from an approved facility. A term loan is usually drawn in full at settlement; a line of credit can be drawn as needed up to its limit.
- Due diligence
- The checks a lender, or a buyer, makes before committing: verifying documents, valuing security and testing that the numbers stack up.
E
- Early repayment fee
- A charge for paying off a loan before the end of its term. Some lenders have none; others charge a fixed fee, a share of remaining interest or break costs. Read more
- EOFY
- End of financial year, 30 June in Australia. Many businesses time equipment purchases and finance around it for tax reasons. Read more
- Equipment finance
- Finance to buy machinery, tools, technology or vehicles, usually secured by the equipment itself. Read more
- Equity
- The part of an asset you own outright: its value minus what is owed against it. Property equity is the most common security for larger business loans. Read more
- Establishment fee
- A one-off fee charged when a loan is set up. It may be paid upfront or deducted from the funds, which reduces the amount you actually receive. Read more
- Exit strategy
- How a short-term loan will be repaid: a property sale, a refinance to a longer-term lender, or incoming funds such as a contract payment. Read more
F
- Factor rate
- A way some short-term and revenue-based lenders express cost as a multiple of the amount advanced. Convert it to a total dollar cost to compare it with other offers. Read more
- Factoring
- A form of invoice finance where the financier buys your invoices and usually collects payment from your customers directly. Read more
- Finance lease
- An arrangement where a financier owns equipment and leases it to the business for a set term, often with a residual value payable at the end. Read more
- First mortgage
- The mortgage registered first on a property's title. It is repaid first if the property is sold, so first-mortgage lenders take the least risk. Read more
- Fixed rate
- Pricing that stays the same for an agreed period. It makes repayments predictable but can make early repayment more expensive. Read more
Jargon sorted, still not sure what fits? A real person can translate your situation into the right loan and lender. Send a 60-second enquiry — no credit check to ask.
G
- General security agreement
- A security interest over all or most of a business's present and future assets, registered on the PPSR. Many unsecured business loans still take one. Read more
- GIC
- General interest charge: the ATO's charge on overdue tax. It compounds daily, and GIC incurred from 1 July 2025 is no longer tax deductible. Read more
- Guarantor
- A person or entity that agrees to repay a loan if the borrower doesn't. In business lending this is usually a director, sometimes with their own property as security. Read more
H
- Hardship
- Difficulty meeting repayments because of a change in circumstances. Contacting the lender early about options is far better than missing repayments. Read more
I
- Instant asset write-off
- A tax rule letting eligible small businesses deduct the full cost of qualifying assets under a threshold in the year they are first used or installed ready for use. Read more
- Invoice discounting
- Invoice finance where you keep collecting from your own customers and the financier stays in the background. Read more
- Invoice finance
- Funding advanced against unpaid invoices owed by business customers. The facility grows as sales grow and is repaid as customers pay. Read more
L
- Letter of offer
- The lender's formal document setting out the amount, term, fees, repayments, security and conditions. Read it, total the cost and ask questions before signing.
- Line fee
- A charge on the limit of a line of credit or overdraft, whether or not you use it. It is part of the true cost of keeping a facility open. Read more
- Liquidity
- How easily a business can meet short-term obligations from cash or assets that convert to cash quickly.
- Loan term
- The length of time over which a loan is repaid. Longer terms lower each repayment but usually increase the total cost. Read more
- Low doc loan
- A loan that verifies income with alternatives to tax returns, such as BAS, bank statements or an accountant's letter. Read more
- LVR
- Loan-to-value ratio: total lending secured on an asset divided by its value. Lenders set a maximum LVR by property type, loan position and borrower profile. Read more
M
- Merchant cash advance
- A lump sum repaid from a share of future card takings or daily sales, common in hospitality and retail. Read more
N
- National Credit Code
- The consumer credit law that governs most personal lending. Credit wholly or predominantly for business purposes generally falls outside it.
- No doc loan
- A loan with minimal income evidence, usually leaning on strong property security and a clear exit instead of financials. Read more
- Non-bank lender
- A lender that doesn't take deposits and is funded by investors or wholesale markets. Non-banks often accept situations outside bank policy. Read more
O
- Overdraft
- A facility attached to a business transaction account that lets the balance go below zero up to a limit. Read more
P
- PAYG instalments
- Regular prepayments of expected income tax made through the BAS. They are a cash commitment lenders take into account.
- Personal guarantee
- A promise by an individual to repay a business debt if the business can't. It puts personal assets at risk. Read more
- PPSR
- Personal Property Securities Register: the national register where lenders record security interests in assets other than land, such as vehicles, equipment and receivables. Read more
- Pre-approval
- A lender's conditional approval before every condition is met, useful for negotiating a purchase. Conditions usually include a valuation and final document checks. Read more
- Principal
- The amount borrowed, as distinct from interest and fees. Repayments reduce principal over the term.
- Private lender
- A lender using private or pooled investor funds, usually for short-term, property-secured loans where security and exit matter more than paperwork. Read more
- Progress payment
- A payment made in stages as work is completed, typical in construction. Lenders funding builds release money against progress, not all at once. Read more
R
- Refinance
- Replacing an existing loan with a new one, often to lower the cost, extend the term, release equity or move away from a short-term lender. Read more
- Residual value
- The amount left owing at the end of a lease or equipment loan, similar to a balloon. It must be paid, refinanced or settled by returning the asset.
S
- Second mortgage
- A mortgage registered behind an existing first mortgage, giving the second lender access to the remaining equity. Read more
- Secured loan
- A loan backed by an asset the lender can claim if repayments stop. Security usually means larger limits and longer terms. Read more
- Serviceability
- Whether a borrower can afford the repayments from income. Lenders test it with their own buffers and rules. Read more
- Settlement
- The point at which loan documents are completed, security is registered and funds are paid out.
- Short-term loan
- A loan repaid over a few months to around two years, often used for stock, cash-flow gaps or an opportunity with a clear payback. Read more
- SIC
- Shortfall interest charge: the ATO charge on tax shortfalls after an amended assessment. Like GIC, it is no longer tax deductible when incurred from 1 July 2025. Read more
- Sole trader
- A person trading in their own name under an ABN. For lending, business and personal finances are assessed together. Read more
- Stacking
- Taking several short-term business loans at the same time. Lenders treat it as a red flag because combined repayments can overwhelm cash flow.
T
- Term loan
- A lump-sum loan repaid in regular instalments over an agreed term. Read more
- Trade finance
- Funding that pays suppliers, often overseas, so a business can land stock and sell it before repaying. Read more
- Trust deed
- The document that creates a trust and sets out the trustee's powers. Lenders check it allows the trustee to borrow and give security. Read more
- Turnover
- Total sales income before expenses. Unsecured lenders often size facilities as a share of monthly or annual turnover.
U
- Unsecured loan
- A loan with no specific asset as security, though usually backed by a director's guarantee and sometimes a general security agreement. Read more
V
- Valuation
- An independent assessment of an asset's value for lending purposes, usually ordered by the lender for property security.
- Variable rate
- Pricing that can move during the loan, usually with the lender's funding costs. It often allows extra repayments without break costs. Read more
W
- Working capital
- The money a business needs to run day to day: current assets minus current liabilities. Working capital loans fill gaps in that cycle. Read more
Ready when you are
From glossary to a real answer in one call.
A short enquiry, no credit check to ask, and someone who speaks lender — and plain English — calls you back.
No credit check to ask
Asking what you could get leaves your credit file alone. A check only happens later, with a lender you've chosen, and you'll know before it does.
Not sprayed to a list
Your enquiry isn't auctioned or blasted to a crowd of lenders. We work out where it belongs and take it to that lender properly.
A real person on your file
Someone who knows the Australian lending market reads your details and calls you. Accurate answers on the form mean the right match first time.