There are several types of business loans in Australia, each designed to support different business needs. The right option depends on why you need the funds, how quickly they are required, the security available and how you intend to repay the loan.
This guide explores the main types of business finance available and the key lending criteria that can influence how an application is assessed.
Common types of business finance
Business loans can be categorised in different ways depending on the lender. Some categories describe how the loan is secured, while others relate to its purpose, term or assessment process. A single loan can also fall into more than one category.
Here are some of the main types of business finance available.
Secured business loans
A secured business loan is backed by an asset, commonly residential or commercial property. The lender considers its value, available equity and existing debt.
Secured business loans can provide property-backed funding for working capital, refinancing, property purchases and other approved business purposes.
Unsecured business loans
An unsecured loan doesn’t rely on property or another specific asset as security. The lender will generally assess business revenue, trading history, credit profile and repayment capacity.
As there is no specific asset securing the loan, eligibility and terms are generally based on the lender’s assessment of the business.
Short-term business loans
Short-term loans provide funding over a defined period and can support working capital, refinancing, property transactions or other time-sensitive business needs.
The lender will generally consider the funding purpose and how the borrower plans to repay the loan within the agreed term.
Bridging finance
Bridging finance covers a temporary gap between an immediate funding requirement and an expected source of repayment. It can support property settlements, refinancing and other time-sensitive business needs while a sale or longer-term finance is being finalised.
A clear exit strategy, such as a property sale or refinance, is central to the assessment.
Low doc business loans
Low doc loans require less financial documentation than many traditional lending options. They can assist self-employed borrowers and businesses where standard financial documentation may not fully reflect their current position.
Depending on the lender, the assessment may place greater emphasis on the available security, loan purpose, existing debt and proposed exit strategy.
Bad credit business loans
Bad credit business loans may provide an option for borrowers whose credit history makes traditional finance more difficult to access. Depending on the lender, the assessment may also consider available security, equity, funding purpose and the proposed repayment plan.
Bad credit relates to the applicant’s credit profile, while low doc lending relates to the level of financial documentation required.
Commercial property loans
Commercial property loans can fund the purchase or refinance of business premises, investment properties, retail sites, warehouses and other eligible real estate.
Lenders can assess the property type, location, value, existing debt, intended use and loan-to-value ratio.
How to choose the best loan for your business
The best loan should match your funding purpose, available security, required amount, timeframe and repayment plan.
Before applying, compare:
- Total interest, fees and charges
- Security and guarantee requirements
- Loan term and repayment structure
- Funding timeframe
- Exit or refinancing plan
Business finance can also be used to refinance an existing loan, consolidate debt or access additional capital, subject to the lender’s criteria.
Explore business loan options with Pronto Funds
At Pronto Funds, we provide $200,000 to $10 million in property-backed business funding using our own capital. We assess applications directly, focusing on the available security, loan purpose, existing debt and proposed exit strategy.
Our business loans in Australia can support property settlements, cash flow, debt consolidation, tax obligations and other time-sensitive commercial needs. Approved loans can settle within 48 hours, subject to suitable security and the required information.
Apply today and we’ll assess your requirements to identify a practical funding structure for your business.