Unsecured business loans are flexible loans that don’t require you to put up an asset as collateral, making them more widely available to businesses of all sizes. They’re designed to be used for a variety of different purposes, rather than buying a specific asset (like a chattel mortgage to buy a car or equipment, for example).
These loans start from as little as $5,000 and can reach up to $250,000 to $300,000, with repayment terms ranging from one year up to a maximum of three or five (depending on your lender). Because there’s no collateral to assess, these loans can be processed and funded very quickly, sometimes as soon as the same day or within 24 hours.
Once you’re approved and receive your funds, you’ll repay your loan in instalments across your term. You’ll pay this off with interest and fees along the way and can choose your preferred payment schedule of either weekly, fortnightly or monthly.
Why apply for a business loan with Savvy?
Business lenders you can compare
How much will the loan cost my business?
There’s a range of variables that can impact the amount you’ll pay for your business loan. Some of these include:
- Interest rate: this is the biggest one. The higher your rate, the more you’ll end up paying overall.
- Fees: lenders can also include various fees on your loan, such as establishment and ongoing charges. These can add up.
- Loan term: the longer you take to pay off the loan, the more interest you’ll be charged.
- Loan amount: larger loans will result in more interest too, as it’s calculated based on your balance.
- Whether you make early repayments: if you’re able to go above the minimum each payment, you can reduce the cost of your loan significantly.
How do I compare unsecured business loans?
When it comes to locking in the best loan deal for your business, there are plenty of things you’ll need to keep an eye out for. Some of the main ones are:
- Interest rates: try to lock in the lowest rate available for your business.
- Fees: as we spoke about earlier, these can end up setting you back a bit, too.
- Borrowing ranges: different lenders will have different loan caps; for instance, some offer up to $250,000, while others may extend this to $300,000.
- Available loan terms: many lenders will allow you to take between one and three years, but some may extend this up to five.
- Repayment flexibility: almost all unsecured business loans will give you the freedom to make additional payments and clear your debt ahead of schedule.
- Eligibility criteria: one of the most crucial things to work out is if your business actually qualifies for finance with your lender. This is especially important for startups and small seasonal businesses.
When you apply with Savvy, though, we’ll handle all the heavy lifting for you. Our consultants survey our flexible lending panel to find the best deal on offer for you.
How much can I borrow with an unsecured business loan?
As mentioned, lenders can typically offer between $5,000 and as much as $300,000. However, it isn’t quite as simple as choosing any amount in this range. There are plenty of factors that your lender will consider when working out how much your business can borrow, including:
- Your business’ revenue and expenses: one of the first things will be checking how much your business is earning and the amount going in the opposite direction on regular costs and bills.
- Your business’ assets: if your business is asset-backed, such as if it owns property, that will boost your chances of approval for a larger loan.
- Your business’ liabilities: your lender will also factor outstanding debts and other loans into the equation, as these eat into the cash available to service the new loan.
- Your business’ credit history: this is another big one. The better your business’ credit record, the more you’ll likely be eligible to borrow, as a poor record of managing past debts will limit borrowing power.
How are unsecured loans different from secured loans?
The big difference between the two is that secured loans require an asset to be put up as collateral. This may be commercial or residential property, vehicles, equipment, inventory or other options. However, the flow-on effect of this means these two loans can end up looking a bit different, as you can see in the table below:
| Unsecured business loans | Secured business loans | |
|---|---|---|
| Collateral required? | No | Yes |
| Borrowing range? | Up to $300,000 | Up to $2 million |
| Repayment terms? | One to five years | One to 30 years |
| Interest rates? | Higher | Lower |
| Fees? | Lower | Higher |
| Processing and approval time? | As soon as 24 hours or the same day | Up to three or four weeks |
What are some of my other unsecured business finance options?
It isn’t just the standard unsecured loan you’ll be able to select. There are plenty of other finance options that don’t require any collateral, including the following:
- Lines of credit: these are another type of loan that allows you to withdraw cash whenever you need it up to an approved limit. This means you can access small amounts at a time, only pay interest on what you use and repay them at your own speed. However, rates and fees tend to be higher.
- Overdrafts: very similar to a line of credit, except it’s a facility attached to your bank account that allows you to withdraw cash beyond $0 up to an approved limit. Also comes without a set repayment structure and higher fees and interest.
- Low doc loans: the only difference between this loan and a standard unsecured business loan is the documentation requirements. You may only need identification and information on your assets and liabilities to qualify. For businesses with established ABNs (12 or more months) and who own property, these are often the best loans for ease of access.
By applying with Savvy, we’ll help you find the best unsecured loan deal to suit your needs.
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The benefits of unsecured business loans
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Fast approvals and funding
You can have your business’ application processed, approved and funded as soon as the same day you apply, helping you access the money you need, when you need it.
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Use the money however you like
Unlike a chattel mortgage for a vehicle or piece of equipment, you can distribute the funds from your loan across your business for multiple purposes.
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For businesses of all sizes
Unsecured loans are available to small businesses who need a bit of extra cashflow, medium businesses looking for some upgrades or as a quick and easy source of money for large businesses.
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No need for collateral
If your business doesn’t own any major assets that are suitable as collateral, there’s no need to fret. Unsecured loans are there to help you out.
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Repay your loan ahead of schedule
You’ll have the freedom to pay above the minimum required repayment to clear your debt earlier, reducing interest and fees in the process.
Crunch the numbers
with our business loan repayment calculator
Your estimated repayments
$98.62
| Total interest paid: | Total amount to pay: |
| $1233.43 | $5,143.99 |
Applying for your business loan with Savvy
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Tell us about yourself and what you want to buy
First of all, fill out our simple online application form. This will tell us details like what you want to buy, how much you need and your business’ structure, revenue and trading time.
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Send through any required documentation
We may require further information in some cases to verify parts of your application. If this is the case, we’ll ask you to submit additional documents via our online portal.
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Discuss your next steps with a Savvy consultant
Once we get all the info we need, we’ll get to work comparing options from our lender panel. A member of our consultant team will give you a call to talk about your options.
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Have your application submitted for formal approval
After you give us the all-clear, we’ll get to work preparing your application to submit to your lender. This can be formally approved as soon as within 24 hours.
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Sign your contract and settle the deal
Once you receive approval, you’ll be sent all the required contracts and forms you’ll need to sign, which can be done electronically. We’ll handle settlement and the asset can be yours before you know it!
Business loan eligibility and documentation
Eligibility
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Age
You must be at least 18 years of age
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Residency
You must be an Australian citizen or permanent resident (or, in some cases, an eligible visa holder)
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ABN registration
Have an ABN registered in your name (available from as soon as one day after registration)
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Usage
Meet business usage requirements (at least 51% of any asset you buy, for example)
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Credit score
You must meet your lender’s minimum personal and business credit score requirements
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Commercial asset
If you're buying an asset with a secured loan, it must meet your lender’s requirements in relation to its type, age and condition
Documents
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Personal information
Such as your full name, date of birth, address and contact details
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Driver's licence
Front and back (or another form of government-issued ID)
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Assets and liabilities
Information about your business’ assets and liabilities, as well as those in your name
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Asset details
If buying an asset, information such as its model and age, is worthwhile having on hand
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Business statements
Business Activity Statements (BAS) and business bank statements may be requested, but not always
