Small business loan interest rates in Australia
What factors affect small business loan interest rates?
It’s not just small business loan interest rates that can affect the affordability of your finance option, either. Other features and restrictions on loans, lending criteria and repayment options can also impact your business. That’s why you should compare your lending options before your commit to a lender, and take the time to check what all of the fees and charges are, the lending terms, how flexible repayment options are as well as ongoing fees, default and missed payment fees. While one lender may appear to offer the best business loan rates, they may not be as flexible or as responsive to your business needs as another provider.
At Prospa, we take the time to really learn and understand each business customer to ensure that we tailor our offer so that you can determine what will work with your business. This service is one of the reasons we’re a loeading online lender to small business in Australia and New Zealand.
Getting the right business finance and interest rates
Check out our online reviews and customer testimonials to get an idea of how we have already helped small business owners just like you.
What could your business do with some extra cash?
Alternatively, our small business Line of Credit offers business owners money on demand that they can use when and if they need to. Paying only interest on the funds used; our Line of Credit helps eligible businesses fill cash flow gaps as required, smoothing out operations and reducing any associated financial strain.
Whether you know how you want to use a new business loan or you’re looking for inspiration and savvy investment ideas, check out the Prospa online blog for a fresh and experienced perspective. You’ll find customer success stories as well as a range of resources, plus general tips and tricks for diversifying and keeping your business thriving no matter what the world throws your way.
Check your loan eligibility
To be eligible for any of our loan products, including our secured business loans, applicants must be at least 18 years of age and either Australian citizens or permanent residents in Australia. Your business must also have a valid ABN and be able to provide 6 months trading history for new businesses and 3 months trading history for established businesses that you have purchased.
FAQs
Frequently asked questions
Every small business is different so there are generally no set or standard small business loan interest rates in Australia. For example, rates can vary from as low as 5% to up to 30% or more, depending on the finance option you have chosen, whether the loan is secured or an unsecured business loan, what your credit risk is to the lender you have chosen as well as your established trading history and lending market fluctuations. Your individual credit file can play an important role in what kind of interest rate you secure too.
Using collateral can be an effective way to potentially reduce the interest rate on a business loan. Collateral acts like a guarantee for the repayment of at least some – sometimes all – of the loan amount should a business default on loan repayments. For this reason, borrowers who choose secured business loans can sometimes access larger cash amounts usually at a better interest rate. The types of collateral a business can use to secure a small business loan include real estate properties – both residential properties as well as commercial premises – as well as other large capital assets like equipment and machinery.
Always consider comparing your lending options before settling on a lender. While interest rates on new finance can play a big part in low cost business loans, they are not the only consideration to take into account. Compare other features and restrictions like repayment flexibility, general fees and charges including establishment fees, ongoing account fees and default or missed payment fees.
When comparing between lenders, you may find that while an interest rate may be higher from one provider, there are other features they offer that offset the additional cost like fast and easy online applications, a dedicated online interface for managing your loan as well as a team of loan brokers who regularly check in to see how your business is operating.
This varies greatly depending on the loan type, the lender and a range of other factors. Generally, interest rates are offered as a per annum percentage or yearly percentage of your total loan value. Interest can then be charged daily, weekly or monthly on your finance option. For business loans, this rate is usually fixed for the term of the loan so you know what your repayments will be and how regularly you need to make them.
The Prospa Line of Credit option charges you interest only on the credit funds that you actually use for as long as you use them.
Instead of choosing a bank to finance your small business, consider choosing a dedicated small business lender. Smaller finance providers may be more likely to offer individual and personalised lending experiences, just as Prospa does.
To be eligible for any of our loan products, you must be at least 18 years old and either an Australian citizen or a permanent resident with a registered ABN. You must also be able to show at least 6 months trading history for your business or at least 3 months trading history for an established business that you have purchased.
It’s quick and easy to apply for funding from Propsa. Our online application process is completed in a matter of minutes and successful applicants can receive the funds into their business account in 24-48 hours.
Other questions?
