Business Loans Australia – Monzi Explores Loans For Your Business

If your business needs funding, it may be worth investigating business loans Australia. Taking a business loan can be a great way to help your business through tumultuous times. Alternatively, a business loan may even be able to help you start your new business.

However, before embarking on your journey to a business loan, it may be worth considering whether this is the right approach for you. Every business operates differently, and while business loans can be useful, it is important to ensure its the right option for your organisation.

Please note, specific ideas and products presented in this article may not be on offer by Monzi nor the lenders we work with. This article presents only general information. Consider seeking professional financial, taxation, legal or other advice to check how the information and ideas presented on this website relate to your unique circumstances.

What is a business loan?

A loan that you take out, specifically to put towards your business, is titled a business loan. Business loans Australia help business owners maintain their business and ideally increase profitability.

When you take out a business loan, you generally receive a lump sum that you pay back regularly, along with interest. Typically these loans are designed to offer a helping hand to small businesses and are usually paid off over a period of up to five years. As with any other loan, business loan approval depends on how risky you and your business is perceived to be by your lender.

However, a specific business loan is not the only method available to you for funding your business. There are many approaches available; you just have to find the one that is right for you.

What do I need to provide to apply for business loans Australia?

When looking to apply for a business loan, there is a handful of information you will need to put forward to progress your application. Keep in mind that before you apply you will need to gather the following information:

  • Several points of identification
  • Multiple months worth of bank statements
  • Your businesses financial statements
  • Proof of your income
  • Australian Business Number (ABN)

If you are a start-up, you might require some extra information as the process may vary. If you are an established company, not only will you need to provide your information, but you may also need to providate that of any directors, guarantors or partners who may be involved. Your lender you request these documents to help them assess whether you are fit for potential loan approval.

Steps to a successful business loan application

It would be naive to pick the loan you think would be best and immediately apply. Instead, it may be far smarter to ensure that you’ve given yourself the best chance of approval before placing your application. To do so, here are a few steps to follow that may boost your appeal to a potential lender.

One: Get to know your finances

Depending on your business model, you may not organise your finances. If you have an accountant or bookkeeper who does this for you, this is fine. However, it is in your best interest to have a basic understanding of your cash flow. An excellent way to do this is to make a cash flow statement that depicts your expenses, income, future projections, and your business’ net profit.

Two: Establish a business plan

Linking in with your future projections on the cash flow statement, your lender may want to see your prospects. It may be helpful to include the goals you have for your business and a snapshot of its current state. Your lender may like to see that you are organised and future-focused before lending to you.

Three: Draw your financial lines in the sand

It may be best not to assume that your lender will tell you your limits. Consider showing initiative and figuring out what you can and can’t repay before applying. Work out your maximum repayments and your loan-to-value ratio (LVR). Will you need your money upfront? Do you have any equity or assets for security? Do you have a guarantor or percentage share for investors? Knowing all these things first may save you the future hassle.

Four: Affirm your desired loan type

There are all sorts of loans and loans features available for small businesses. Now that you, ideally, understand what your business needs, you should be able to choose the right financial products. Ensure you consider the interest, flexibility, terms and fees. While a standard principal and interest loan may be one option, you may also apply for a line of credit or other loan products.

Five: Prepare the paperwork

As mentioned above, there are several documents and statements you will need to provide your lender. Ensure you gather these documents beforehand, to make the process easier.

Six: Seek the help of an expert

If you aren’t super confident with choosing the right company or answering your lender’s questions, it’s ok to seek help. The Australian Securities and Investments Commission (ASIC) has a list of registered companies. You can also visit the Australian government’s guide to applying for business loans. Finally, consider approaching a financial advisor for further assistance.

Seven: Apply!

Now that you’ve done all the hard work and research, you can place your application. Ensure that when you apply, you have combed through the offer carefully. A cheap option that sounds too good to be true is probably just that.

Is it possible to get business loans Australia for a start-up?

If you have a great business idea but are struggling to find the cash, then you’d know it can be hard to find someone who will take a chance on you. Business loans Australia can be very appealing to your potential business. They are quick and flexible and mean that you won’t need to cover anything in cash.

It’s never just that easy, however. Most lenders prefer to lend to businesses that are established and profitable. Lenders typically desire a minimum yearly revenue from your end for your business to qualify. If you don’t have this, it becomes more difficult.

So, what can you do? Well, it isn’t all hopeless. Some businesses may offer loans specifically to start-ups. However, if this is not possible for you, then there are several other ways to amass the desired funds.

Alternate ways to fund your business

What are some alternatives for business funding?

The first place worth looking is for grants from the Australian government. These grants may not be huge, instead they may be as simple as tax breaks. However, any option that can give you or save you money is worth considering.

Next, consider a business credit card. Getting a card specifically for business expenses can give you access to immediate funds to cover your costs. Keep in mind that credit cards come with limits which may prevent you from making larger purchases.

You could consider a personal loan. Personal loans are a more straightforward loan type that may be able to lend you cash that you can use for a range of purposes. If you believe this may be a suitable method of funding your start-up, consider letting Monzi help you out. However, note that costs may be high, meaning they may be an inappropriate way to finance your business venture.

Other business finance options include loans with shorter terms, various financial options, and business overdrafts. Short term loans give you access to a smaller sum than a standard loan. Business overdrafts permit you to take out more funds even after your account balance falls below zero. And financing for equipment or invoicing can be cheaper as you may have the option to lease rather than buy.

Keep in mind that whatever option you choose, there may be accompanying business loan interest rates and fees attached.

Is your business small?

Some lenders specifically offer business loans to ‘small businesses’. But what makes a business small? Well, if you’re a start-up its fair to say you are a small business. However, ASIC defines a small business as:

  • Having less than 100 employees after the financial year,
  • An annual revenue below $50 million, or
  • Less than $25 million of gross assets after the financial year

If your business meets at least two of the above, you are most likely a ‘small proprietary company’.

Do you need to secure your business loan?

Often, lenders require you to secure business loans. This is as these loans can be quite large. Typically, the larger the loan, the more expensive the security needs to be to balance it out.

Of course, this is not always the case. Security sometimes referred to as collateral, is a way for you lender to counterbalance a potentially risky transaction. However, some lenders may forgo security and offer unsecured business loans. This may be a good option if you don’t want to secure your loan, or don’t have anything to secure with.

Keep in mind that if you do find a lender who does not require security, you may have to pay higher interest and fees to compensate for this risk. If you are worried about signing over collateral, then you may be doubting your ability to make your repayments. If this is the case, taking out a loan may not be the best option for you.

Man on phone discussing applying for business loans Australia

Business loans Australia deposits

There are two types of deposit, a cash deposit, or a collateral deposit (security). Here we will focus on cash deposits. The loan-to-value ratio has a strong influence over the size of your deposit. Some lenders will offer an LVR of 100%. This means you do not require any deposit at all; however, this is not that common.

Typically, when it comes to business loans, lenders are looking for a deposit of 10-30%. This means they may be requesting an LVR of 70-90%. However, the required LVR for your loan may change according to certain factors. Your personal and business credit history is one of these factors. If your credit history is a bit sad, you will most likely have to put down a larger deposit.

The amount you borrow and your intentions for it may also sway the required deposit. If you intend to use it to bolster productivity, your lender may appreciate this more than if you want to improve your office’s interior design.

Compare business loans Australia

If you believe you meet the criteria for a business loan, you may be at a loss regarding which loan to choose. Luckily, there are many free comparison tools available online that can make this easier for you.

All you have to do is search for business loans Australia comparison. Once you find a tool that suits you, enter the information about your security, loan amount, state and interest type. Once you have done so, the comparison tool may generate the applicable business loans on the market. Thereby allowing you to examine the available offers side by side.

This can be handy as there are often a lot of products on the market. A business loan comparison tool is a great way to save you time when making your decision.

Business loans Australia calculator

Following on from the comparison tool, you can also access business loans Australia repayment calculators. These are another time-saving tool. Much like you do with the comparison tool, you simply enter the same details. However, the business loan calculator may also ask for the interest rate, loan term, and repayment frequency. Once you have entered the information, it will calculate your possible monthly repayments.

It may be a good idea to use the comparison tool first to choose an offer you like, and then use the calculator to work out your repayment options. By doing so, you can work out if the loan will sit within the constraints of your budget.

What are the pros and cons of borrowing to start a business?

As with most things, there can be advantages and disadvantages to business loans. These are always important to consider, especially if you are a new or small business.


  • Availability of funds: The most prominent advantage is that you will have access to funds within a short time frame, rather than trying to save the money yourself.
  • Flexible payment terms: Naturally, this will depend on the lender and the borrowed amount. However, business loans may be flexible.
  • Tax deductions: A business loan in itself is not taxable income. However, the government may treat the loan that becomes part of your working capital as taxable income. Ensure you hold onto the right documents for tax time.


  • Lack of choice: if you are a small business, you may struggle to locate useful loan features due to how your lenders perceive you.
  • Banks favour secured loans: Whilst there are lenders beside banks, the majority of banks prefer your loan to be secured. If you lack adequate security, this may not be an option for your business.
  • Improvement not guaranteed: Borrowing money to boost productivity may sound good initially; however, this may fail. If so, this will leave you without the necessary funds to repay your loan. This can become a serious problem for your business.

Finally, to help guide your thinking process, learn more with Monzi’s guide to starting a business in Australia.

What do you do if your application is denied?

If you were confident about your application, but find out it didn’t receive approval, it is understandable that you might be annoyed or upset. However, before you go rushing to place another application, there are a few things worth doing.

Begin by trying to work out why you didn’t receive approval in the first place. Reach out to your lender and get them to let you know why your application ended in rejection. Understanding this will help you to correct this problem before re-applying. This may mean doing some credit repair. However, it is better to fix the problem rather than lowering your standards and trying elsewhere.

This may mean you will have to avoid placing another application for a period. Too many applications can further damage your credit score, meaning it is far better to give it some time.

When you are ready to apply again, you don’t have to return to the same lender. You may have even realised that you would like different loan features. As a result, you’re welcome to find a new credit provider.

Bad credit business loans

If you, or the business itself, have bad credit, it may still be possible to obtain a business loan. Your lender will instead examine the aspects of your life outside of your credit history. While the credit history will be a base reference, your lender may assess whether you are taking productive steps towards improving your money management.

If you are able to demonstrate that your past mistakes won’t happen again and that you have sufficient capital to repay any money that you borrow, then it’s possible that your application may be approved. That said, not all lenders may work with business who have poor credit.

Finally, keep in mind it’s never a bad idea to work on improving your credit score. This is because it may help you in the long run and potentially open the market up for you in terms of the loans you can take out.

No credit check business loans

If you believe your credit report looks terrible and you would like to avoid a credit check altogether, this may be possible. However, it is more common in personal loans and will depend on the lender you choose.

The process is similar to that of a bad credit business loan. Your lender will examine all of your circumstances and any bumps in the road your business may have encountered. You most likely won’t be able to borrow a larger amount without a credit check.

Guaranteed approval business loans Australia

As nice as it would be, there is no such thing as guaranteed loan approval. In fact, it may be smart to avoid companies that are advertising such a thing. While many lenders may be happy to work with your bad credit, those offering guaranteed approval may be predatory. If you are unsure about your lender, feel free to search ASIC’s listed of approved businesses.

What is a good credit score for a business loan?

So, when it comes to business loans Australia, what is a good credit score? In general, your credit score will be between 0-1000 or 0-1200 depending on which credit provider you use. A good business credit score is typically considered to be between 622 and 725. Anything under this and you may have to look into bad credit loans.

On the other hand, you are likely to have a much easier time if your credit is considered very good (726 – 832). If your business’s credit score is considered excellent (833 and over) getting a business loan shouldn’t be too difficult for you.

Using a credit card for your business expenses

If you’re unsure whether you will qualify for business loan approval, a credit card is a viable alternative. A business credit card is good for multiple reasons. Firstly, you can have additional cardholders. Unless you have a guarantor on a business loan, you are solely responsible. With a card, this is not the case.

Moreover, credit cards offer you more flexibility with your repayments, along with accompanying accounting and budgeting software. One other attractive feature of a business credit card is the potential for rewards points. If you have to fly often for business reasons, it may work well for you to take advantage of frequent flyer points.

Keep in mind, however, that credit cards do come with higher interest rates and annual fees. Weigh the pros and cons before deciding where to obtain your funds from.

Business loans Australia fees

Naturally, the financial environment has fees every way your turn. Whilst not all of the following are attached to every loan option, they are common amongst business loans.

One common fee is the initial loan set-up fee. It may come under the title of establishment fee, application fee, or upfront fee. Regardless, this is the cost typically charged by some banks. Early repayment fees, annual fees, and exit fees are the next lot of common charges. Beyond this, you can also be charged for document creation, terminations, risk assessments and electronic transactions.

As stated, not all of these apply to every lender. Credit providers vary in their terms and conditions as well as the charges applied on your loan. Given this, you may need to shop around and compare options to determine which is the best for you business.

Use a personal loan to help with your business

Throughout this article, there have been multiple mentions about personal loans. With this, if you don’t run a business but find yourself needing cash to cover a handful of personal expenses, then consider letting Monzi help you out.

We are 100% online and paperwork free. We’re all set to do our best to match you to a lender potentially within 60 minutes if you apply during business hours. Best of you, you may be able to borrow amounts ranging from $300 to $10,000 with repayment terms of up to 24 months.

We understand that personal finance isn’t always smooth-sailing and would like to do our best to relieve some of your stress. All you need to do is click ‘apply now’ and we might be able to find a lender who can help.

Note, however, that personal loans are for personal use. As a result, you may not be able to use them to fund your business operations (e.g. to cover payroll). That said, they may potentially be an option to get your small project up and running which may eventually turn into a business.

Let’s be friends!

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Don’t forget that if you have any questions about applying or what we do, you can contact our friendly team at

Factor In Costs

You won't use a penny to apply for our lender-finding service, but here's some costs you could expect from a lender

Loan amount

$300 - $2,000


12 months (minimum)

12 months (maximum)


20% upfront establishment fee

+ 4% monthly fee


Representative example based on a loan of $1000 over 6 months a borrower can expect to pay a total of $1440.

Disclaimer: Under the current legislation, all Small Amount Credit Contract loan providers don’t charge an annual interest rate. The maximum you will be charged is a flat 20% Establishment Fee and a flat 4% Monthly Fee. The comparison rate on loans between $300 and $2000 could be up to 199.43%. The minimum loan term is 16 days and maximum loan term is 12 months. Representative example based on a loan of $1000 over 6 months a borrower can expect to pay a total of $1440. WARNING: This comparison rate is valid only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan.

Loan amount

$2,100 - $4,600


13 months (minimum)

24 months (maximum)


47.8% Annual Percentage Rate (APR)

65.85% Comparison Rate p.a.


Representative example based on a loan of $2500 over 24 months a borrower can expect to pay a total of $4,556.88.

The maximum interest rate for a Medium Amount Credit Contract is 47.8%. Comparison Rate 65.85% p.a. The maximum loan term is 24 months. Representative example based on a loan of $2500 over 24 months a borrower can expect to pay a total of $4,556.88. WARNING: This comparison rate is valid only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Credit criteria and terms and conditions apply.

Loan amount

$5,000 - $15,000


13 months (minimum)

24 months (maximum)


17% Annual Percentage Rate (APR)

36% Comparison Rate p.a.


Representative example based on a loan of $10,000 over 36 months a borrower can expect to pay a total of $16,489.

The starting interest rate for a Personal Loan is 17%. Comparison Rate 36% p.a. The maximum loan term is 24 months. Representative example based on a loan of $10,000 over 36 months a borrower can expect to pay a total of $16,489. WARNING: This comparison rate is valid only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Credit criteria and terms and conditions apply.