About Unsecured business loans

Unsecured business loans allow for your business to borrow without providing any security. They are usually easy to attain and approved fast!

Up to $250k without collateral
Up to 36-month term (typically 12-month term)
Used for any business purpose
Trading for a minimum of 3 months
Quick approval process
Same day funding
Rates change from lender to lender subjected to application strength

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Unsecured business loan: definition

Unsecured business loans allow a business in Australia to get money for business purposes without the need to provide any collateral. This type of loan can help to make the best of the seasonal ups and downs. Unsecured business loans are generally not secured against the assets of the business. Most of the time, the lender assess the application based on the business cash flow and the borrower’s credit history. Financial institutions such as banks are usually stricter in terms of lending funds than alternative lenders who are willing to take a higher risk. This is one of the reasons why finance provided by alternative lenders is provided at a higher rate than the banks due to the greater risk they are generally taking. Furthermore, lower interest rates are available for secured business loans, as the lenders have security they can access via a property, vehicle or some type of equipment.

Unsecured business loans: lending criteria

At Lending Connect, we talk to our clients to understand their needs and most importantly, their chances to qualify for an unsecured business loan. Lending criteria may change from lender to lender. Therefore we work with and for our clients to secure the best deal with one of our partners.

Be an Australian Business operating in Australia with an active ABN
Show an annual turnover of minimum $75k
Trade for a minimum of 3 Months
Have a profitable business with a good cash flow
Show good credit score

Unsecured business loans: repayment terms

At Lending Connect, we work with over 50 lenders. Despite the fact unsecured business loans being generally short-term by nature, our partners can offer the unsecured business loan from 3 months up to 3 years (and in some cases even 5 years). Considering the interest rate, most of the borrowers choose a 12-18 month terms.

Unsecured business loans: benefits

Many small Australian businesses often cannot provide any collateral when borrowing money. Therefore unsecured business loans are prevalent Because in the event the business falls on tough times and can not afford to repay the loan, the lender cannot make a charge against the company’s assets and thereby allows the business to continue operating through using these assets. Obviously, the loan still requires to be paid to the Lender. Unsecured business loans work very well when a company has an opportunity to buy stock, machinery or equipment that increase productivity and therefore generate revenue that makes the business grow.

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Unsecured business loan: other benefits

Quick and easy application process

Unlike other business loan products, the application process for an unsecured business loan is fast and straightforward as no personal or business assets are required as security.

Relationship building with a lender

An unsecured business loan represents a high risk for a lender. After all the repayments have been finalised, the lender could be able to offer better term to the borrowers, and the level of trust in its business has improved.

Improved business credit score

Successfully paying off an unsecured business loan makes it simpler to obtain more credit in the future (if needed) because the credit score improves and the positive credit history as well.

No personal or business collateral required

In case of default or bankruptcy, the lender will not be to lay hold on any of your personal or business assets.

Fast access to the funds

Usually 24-hours: unsecured business loans don’t require any collateral, and this is why the approval process can be rapid.

Simple to get access to

Business cash flow and credit score are the main criteria to get access to unsecured business loans.

Unsecured business loans: disadvantages

The lender still allows access to the credit funds but the downside is that generally a higher interest rate is applied to the loan. Keeping the repayment terms as shortest as possible allows a business to pay less interest and therefore to reduce the cost of the loan.
Personal guarantees – this is often expected to be provided through a director’s guarantee as a part of the unsecured business loan.
Short term loans: lenders want to reduce their risk, and they approve the application based on a short-term repayment plan.
Repayment penalties: if a business wants to repay the debt before the end of the loan term, in some cases, the lender’s terms and conditions include penalties to the borrowers. The reason for that is straightforward: lenders do not want to lose out on potential interest that they will obtain for the full duration of the unsecured business loan.

Unsecured business loans: refusal reasons

At Lending Connect, we work with many lenders, and over the years, we have developed a strong relationship with them. We know precisely what their lending criteria are. Contact us to check your eligibility. We are a finance broker, and we put our client’s interest first. As a result of that our refusal rate is very low because we know what lender is suitable for our clients. However, the final decision on approving an unsecured business loan is not on us. From our experience, the most common reasons for refusing unsecured business loans are:

Inconsistent Revenue

Outstanding repayments

Business open too recently

Weakening Industry

Seasonal Business

Low credit score

Unsecured business loan: how to apply

Partnering with over 50+ business loan providers at Lending Connect, we unlock credit opportunities for your business. Our clients in 99% of the cases get the money in their bank account within 24 hours from the application.

Thanks to our industry knowledge, we guide you through the process to find the lender that can provide the type and size of business loan that you are looking for. Our lenders are business specialists and are dedicated to funding eligible small businesses with unsecured business loans. Let us help you to find the one that best suit your needs. It all starts with an enquiry. Call Lending Connect on 1300 911 621 or click on “get started now” and we call you back to see if you qualify for unsecured business loans.

Our lenders usually require a combination of the below as a part of an application:

Unsecured Small Business Loan