Finty

Compare unsecured business loans

Set your amount and term to see the repayment and total cost of 8 unsecured business loans side by side, so you know what you'd pay before you apply.

Business loans with no property or asset as security. They're usually faster to arrange but cost more, and most lenders still ask for a personal guarantee from the owners.

Written byDavid Boyd

What will it cost you?

Enter how much you want to borrow and for how long, and we'll show your monthly repayment and total cost on every loan below, at each one's lowest published rate.

6 loans

Repayments use each loan's lowest published rate and include any monthly fee. The total adds the establishment fee. Business loans don't have to publish a comparison rate, so compare fees as well as the rate. A loan shown as “On application” has its rate set case by case.

The short version

  • An unsecured business loan needs no property or assets as security.
  • It's quicker to arrange, but the rate is usually higher.
  • Most lenders still ask for a director's guarantee.

How unsecured business loans work

No property or asset is held as security, so approval can be quicker and you don't risk a specific asset. In return, rates are higher, terms are shorter and limits are lower.

Most lenders still ask the owners for a personal guarantee, which means you're personally liable if the business can't repay.

Pros

  • Fast. Online lenders can decide within a day and pay soon after.
  • No assets tied up as security.
  • Good for short term needs like stock or a busy season.

Cons

  • Higher rates than secured loans.
  • Shorter terms, so higher repayments.
  • A director's guarantee still puts your own assets at risk.

What to compare

Business loans don't have to show a comparison rate, so add up the costs yourself: the interest rate, any establishment and ongoing fees, and what it costs to repay early.

Business lending isn't covered by the responsible lending rules that apply to personal loans and home loans, so a lender won't necessarily check the loan suits you. Work out what you can afford before you apply.

What you'll need to apply

Lenders usually ask for:

  • Your ABN, and how long the business has been trading. Many lenders want at least one to two years.
  • Business financial statements and tax returns, or recent bank statements and BAS for smaller loans.
  • Details of any property or asset offered as security.
  • A personal guarantee from the directors or owners, which makes you personally liable if the business can't repay.

Alternatives

  • A secured business loan, at a lower rate if you have property or assets.
  • A business overdraft or line of credit, for costs that come and go. You pay interest only on what you use.
  • A business credit card, for smaller, short term costs you can repay within the interest free period.
  • Invoice finance, if customers are slow to pay. A lender advances most of what you're owed on your invoices.

Questions people ask

What is a director's guarantee?

A promise by a business owner to repay the loan personally if the business can't. It means your own assets can be at risk, even on a loan made to a company, so get advice before you sign.

Do consumer credit laws cover business loans?

Mostly not. The National Credit Code covers loans mainly for personal use, so business loans don't have to show a comparison rate and have fewer protections. Small businesses can still complain to AFCA about most lenders.

How long does my business need to have traded?

Banks usually want two years of trading and tax returns. Some online lenders accept six to twelve months, and judge the business on its bank statements, usually at a higher rate.