Compare startup business loans to cover your early costs. Explore finance options for equipment, stock and other business expenses, and find a loan that fits your goals.
Here’s the tricky part about starting a business: the bills often arrive before the first sale. Equipment, stock and fit-out costs can add up quickly, putting pressure on your savings before your business gets going. A start up business loan could help cover these early expenses, but eligibility criteria, interest rates and fees vary between lenders. Compare options from 40+ lenders, estimate your repayments and explore what could work for your business before you apply.
A start up business loan is finance for a business that’s brand new, with little or no trading history. You borrow a set amount and pay it back, with interest and fees, over an agreed term. Repayments are weekly, fortnightly or monthly.Â
Because there are no trading records to check, lenders look elsewhere: your credit file, your industry experience, your business plan and anything you can offer as security.
Trading history is where lenders really part ways. Online lenders often want around six months. The big banks usually ask for a year or two. A handful will talk to you on day one, though that tends to come with a higher rate or a request for security.
Before you obsess over the rate, find out:
We’ve put 40+ participating lenders in one place so you can see them side by side.
Honestly, it comes down to two things: what you’re paying for, and whether you’ve got anything to offer as security.
Nothing backs this one, so it's where a lot of first-time owners without property or equipment end up. You'll pay for that with higher rates and shorter terms, and most lenders still want the director to sign a personal guarantee. More on unsecured business loans.
Put up property, a vehicle or equipment as security and you may get a bigger loan or a lower rate. The catch is simple: miss repayments and the lender can sell that asset. How secured business loans work.
Need one big item, like a food truck or a commercial oven? Equipment finance pays for it, and the item itself is the security. New businesses tend to get approved more easily this way, since the lender can repossess the equipment if things go wrong. Equipment finance in more detail.
Instead of a lump sum, you get a limit to draw from, and you generally pay interest only on what you use. Handy if your income bounces around from month to month. Business lines of credit explained.
A new business gives lenders little to go on, so start up loans often cost more. Indicative rates range from about 6.8% to 9.5% p.a. for secured loans and 9.5% to 18% p.a. for unsecured loans. What you’d actually pay comes down to your credit history, security, loan amount and lender.
Fees matter as much as the rate, sometimes more. Ask each lender for a full fee schedule and check for:
Take a $50,000 loan over 36 months at three example rates. Fees aren’t included, and real loans will differ.
| Interest rate (p.a.) | Monthly repayment | Total interest | Total repaid |
|---|---|---|---|
| 8% | $1,567 | $6,405 | $56,405 |
| 12% | $1,661 | $9,786 | $59,786 |
| 18% | $1,808 | $15,074 | $65,074 |
Jump from 8% to 18% and you’ll pay about $8,700 more in interest. A longer term feels easier but costs more. At 12%, stretching to 5 years drops the repayment to about $1,112 a month, yet total interest climbs to about $16,733. Add a 2% establishment fee and that’s another $1,000, so the headline rate only tells part of the story. Want to try your own numbers? Use our business loan calculator.
Yes, but expect to pay more or offer more. With no trading history, lenders look hard at your business plan, your personal credit history and any assets you can pledge.
No trading history:Â Equipment finance is usually the easiest door to open. After that, try a secured loan against property or a vehicle, or a smaller unsecured loan from an online lender that accepts a short history. Putting in some of your own money helps too.
Bad credit:Â Some online and alternative lenders will consider it, usually with higher rates and lower limits. Security, a solid plan and some of your own money can make up for a weaker credit file. One thing to watch: every application leaves an enquiry on your file, so compare first instead of applying everywhere at once.
Every lender has its own list, but expect to be asked for:
Ticking every box still doesn’t guarantee approval. Each lender makes its own call under its own credit rules.
Two loans with the same rate can cost very different amounts. Compare:
Try a few different amounts and terms in our business loan calculator and watch how the repayments move.
Getting started isn’t complicated once you know what’s ahead.
Try a few loan amounts and terms in our business loan calculator.
Check trading history rules first, then rates, fees and security.
Get your ABN, ID, bank statements and business plan together.
Pick an option and fill in the application.
If the lender says yes, the funds are paid out under the agreed terms.
Starting a business comes with plenty of upfront costs. We help you explore startup finance options, understand what lenders look for and estimate repayments before you apply.
Find clear, direct answers to common questions about start up business loans.
Usually. With less history to go on, lenders charge more. Indicative rates run from about 7% to 18% p.a. depending on security and lender. Offering security, or waiting until you’ve traded for six to twelve months, may get you a lower rate.
Yes. Government grants (listed on business.gov.au), equipment finance, invoice finance once you’re billing customers, or an outside investor are all worth looking at.
Not with an unsecured loan. If you go secured, lenders generally accept property, vehicles, equipment or term deposits.
It’s a promise to repay the business debt out of your own pocket if the business can’t. That puts your own assets at risk, your home included.
Most lenders will want one from a new business. It does the job of the trading records you don’t have yet.
Online lenders can often come back on unsecured applications in a day or two. Secured and bank loans can take anywhere from one to several weeks.
Run the numbers, see what participating lenders could offer, and take it from there.
