There is no single best business loan. The right one depends on what the money is for, what you can offer as security, how your income arrives and what the whole facility costs. This guide walks through the choices in order and links to the detailed guide on each.
loan-o is a Brisbane finance broker based in Milton. We compare business loans, asset finance and lines of credit across a panel of 50+ bank and non-bank lenders. This guide is general information, so check the details of any offer and the tax side with your accountant.
Choosing a business loan: the decisions in order
Start with what the money is for
- A known, one-off cost, such as fit-out or a large purchase: a term loan tends to suit it.
- Timing gaps and uneven cash flow: a business line of credit tends to suit it.
- A vehicle or machine: asset finance, often a chattel mortgage, with the asset as security.
- Unpaid customer invoices: invoice finance advances cash against them.
- Day-to-day cash flow: working capital finance, though it is the wrong tool in some cases.
- Line of credit vs term loan
- Working capital loans for small business
- How does a chattel mortgage work?
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Term loan or line of credit
A term loan pays out the full amount at the start and you repay it, plus interest and any fees, over a set term. The repayment is known in advance, so it is easy to budget for. Once you have repaid part of it, you generally cannot draw that amount again.
A line of credit gives you an approved limit. You draw what you need and repay it as cash comes in. In most cases you pay interest on the amount drawn rather than the whole limit, though fees and redraw rules vary between lenders. Many businesses use both, for different jobs.
Secured or unsecured
- Secured: you offer an asset as collateral. Secured loans generally come with lower rates, higher limits and longer terms than unsecured loans of a similar size, and the lender can repossess the asset if repayments stop.
- Unsecured: not tied to a specific asset, so lenders look harder at trading history, revenue, bank statements and credit. Rates are generally higher, limits lower and terms shorter, though approval can be faster.
- A personal guarantee is separate from security. It is a director's personal promise to repay if the business cannot, so an unsecured loan can still put personal assets at risk. Ask exactly what you are agreeing to before you sign.
Newer businesses and low doc
Lenders check how long you have held your ABN and traded, your GST registration and turnover, and the directors' credit. Some lenders specialise in newer businesses and weigh these differently, so the right lender matters more than the lowest rate.
Low doc loans ask for something other than full financial statements, with trade-offs on cost and security. They may suit some businesses and not others.
How much can you borrow
There is no single number. What a lender will provide depends on your income and cash flow, your existing commitments, the type of finance, the asset and your credit file. The same business can get a different answer from different lenders.
What the whole loan costs
Two offers can look alike on rate and still differ in fees, term, balloon, conditions and the total you repay. Compare the repayment, the term, any balloon, fees, the total payable, and what happens if you pay the loan out early.
Broker or bank direct
A broker compares several lenders for you. Going direct means one bank and one set of criteria. Each suits different situations, and the guide below sets out when each one makes more sense.
Key dates for 2027: RBA cash rate decisions
The Reserve Bank has scheduled eight Monetary Policy Board meetings in 2027. The decision is announced at 2:30 pm Sydney time on the second day of each meeting. The cash rate target was 4.85% as at 9 November 2026.
| Meeting | Decision announced |
|---|---|
| 8-9 February 2027 | 9 February 2027 |
| 22-23 March 2027 | 23 March 2027 |
| 3-4 May 2027 | 4 May 2027 |
| 21-22 June 2027 | 22 June 2027 |
| 9-10 August 2027 | 10 August 2027 |
| 27-28 September 2027 | 28 September 2027 |
| 1-2 November 2027 | 2 November 2027 |
| 13-14 December 2027 | 14 December 2027 |
What a cash rate change means for your loan
The cash rate influences funding conditions, but a lender also prices for the borrower, the security, the loan structure, the term and its own costs. A change in the cash rate does not move every business loan by the same amount or at the same time. The dates above are from the RBA's published schedule, so check the RBA site for any change.
Tax figures such as the instant asset write-off and the car limit change by financial year. Check the ATO for the current figures and ask your accountant how they apply to your purchase.
1. Business loan types
2. Qualifying and harder cases
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Sources
- Reserve Bank of Australia. Board Meeting Schedules. Monetary Policy Board meeting dates for 2027. Retrieved 9 November 2026.
- Reserve Bank of Australia. Yearly Calendar. Decision announcement dates and the 2:30 pm announcement time for 2027. Retrieved 9 November 2026.
- Reserve Bank of Australia. Cash Rate Target. RBA Statistics. The cash rate target of 4.85% took effect on 4 November 2026. Retrieved 9 November 2026.
- Reserve Bank of Australia. Statement by the Monetary Policy Board: Monetary Policy Decision. 3 November 2026. Retrieved 9 November 2026.
Finance is subject to lender approval, lending criteria, terms, conditions, fees and charges. The information in this article is general and does not take into account your personal or business needs. It should not be treated as personal financial, tax, legal or credit advice.
Last reviewed: 9 November 2026. This content provides general information only. It should not be treated as personal financial, tax, legal or credit advice.
Frequently asked questions.
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There is no single number. Lenders look at your income and cash flow, existing commitments, the type of finance, the asset and your credit file, and different lenders can give different answers for the same business.
It depends on the purpose and what you can offer. Secured loans generally have lower rates, higher limits and longer terms, but the lender can repossess the asset if repayments stop. Unsecured loans are not tied to an asset but generally cost more and may still need a personal guarantee.
A term loan tends to suit a planned, one-off cost with a repayment you know in advance. A line of credit tends to suit timing gaps and uneven cash flow. Many businesses use both for different jobs.
Low doc loans exist. Lenders may ask for something other than full financial statements, with trade-offs on cost and security. They may suit some businesses and not others.
The RBA has scheduled eight Monetary Policy Board meetings in 2027, with decisions announced on 9 February, 23 March, 4 May, 22 June, 10 August, 28 September, 2 November and 14 December, at 2:30 pm Sydney time. Check the RBA website for any change to the schedule.
No. The cash rate influences funding conditions, but lenders also price for the borrower, the security, the structure and their own costs, so business loan pricing does not move by the same amount as each RBA decision.
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