Business Term Loans Australia 2026
Flexible funding for real business moves. Secured rates from 7.49% p.a. and unsecured from 12.85% p.a. Compare 40+ Australian lenders.
TL;DR — Business Term Loans
- Lump sum upfront, repaid in scheduled instalments over an agreed term — typically 3 months to 5 years for unsecured, longer for secured.
- Unsecured rates from 12.85% p.a. (May 2026); secured facilities from 7.49% p.a.
- Covers both secured and unsecured options for any general business purpose.
- Most SME term loans in Australia carry a director's personal guarantee — even when 'unsecured'.
- If you're specifically pledging property or high-value assets for larger borrowing, see secured term loans.
Business Term Loans in Australia — Flexible Funding for Real Business Moves
Whether you're expanding, refitting, hiring, or just need solid working capital, a business term loan is the go-to funding tool for Australian businesses that want a defined amount, a clear repayment schedule, and the flexibility to use the money where it's needed most. LoanGorilla compares business loans from 40+ lenders — so you're not locked into the first rate you find.
Check your business term loan options with LoanGorilla — free comparison, no credit score impact, takes 2 minutes.
Compare NowRates at a Glance — Business Term Loans (May 2026)
| Feature | Unsecured Term Loan | Secured Term Loan |
|---|---|---|
| Rate from | 12.85% p.a. | 7.49% p.a. |
| Borrowing range | $5,000 – $500,000 | $10,000 – $5M+ |
| Term | 3 months – 5 years | 1 – 15 years |
| Approval speed | 24–72 hours | 1–4 weeks |
| Collateral required | No (director guarantee common) | Yes |
Indicative rates as of May 2026. Unsecured average ~17.35% p.a. Rates vary by lender, loan size, and borrower profile. RBA cash rate: 4.35% (effective 6 May 2026).
What Is a Business Term Loan?
A business term loan is a straightforward funding structure: borrow a fixed amount now, repay it over an agreed period through scheduled instalments (weekly, fortnightly, or monthly). The balance doesn't revolve like a line of credit or an overdraft — you draw once, then you pay it down.
Term loans come in two broad flavours: unsecured and secured. Most SME term loans in Australia sit somewhere on the spectrum between fully unsecured (no collateral, just a director's guarantee) and fully secured (property or high-value assets pledged). The structure you choose affects your rate, your borrowing limit, and the approval timeline.
This page covers the full landscape — both secured and unsecured term loans for general business purposes. If you've already decided to leverage property or substantial equipment as collateral specifically to access larger limits and lower rates, our secured term loans page goes deeper on that structure.
How Business Term Loans Work
You apply
Submit your financials, trading history, and a clear purpose for the funds.
The lender assesses
They review your cash flow, credit profile, and (if applicable) the value of any security offered.
You receive a lump sum
The agreed loan amount, minus any upfront fees, lands in your account.
You repay on schedule
Fixed monthly, fortnightly, or weekly repayments until the loan is cleared.
Interest is calculated
On the outstanding balance for most structures, or as a fixed fee upfront — some short-term fintech lenders use factor rates instead of interest rates. Watch for this.
Fixed vs variable rates on term loans: Most SME term loans are offered at a fixed rate, giving you predictable repayments. Variable-rate term loans exist but are less common. With the RBA cash rate at 4.35% as of May 2026 — and further hikes expected by all four major banks in May 2026 — many borrowers are favouring fixed rates right now for certainty.
Secured vs Unsecured: Which Term Loan Structure Suits You?
This is the most important decision when comparing business term loans.
Unsecured Business Term Loans
No asset is pledged as security. Lenders rely on your business's trading history, cash flow, and the directors' credit profiles. Higher rates, lower limits — but faster approvals and no valuation process. Best for: businesses that don't own property or significant assets, need funds quickly, or are borrowing $5,000–$250,000 for short-to-medium-term purposes. Watch out: director's personal guarantees are almost universal — you may not have pledged an asset, but you're personally liable if the business can't repay.
Secured Business Term Loans (General)
An asset is pledged — most commonly commercial property, residential property, or high-value equipment. The lender's reduced risk translates to lower rates and higher limits. The trade-off is time: valuations, legal work, and PPSR registrations add weeks to the process. Best for: businesses with assets to leverage, borrowing larger amounts, or wanting the lowest possible rate over a longer term.
Important distinction: There's a difference between a term loan that happens to be secured (e.g., a $150,000 unsecured term loan where you've also signed a director's guarantee and offered equipment as secondary security) and a secured term loan structured specifically around property equity for major capital projects.
What Can You Use a Business Term Loan For?
Term loans are the workhorse of Australian business finance — adaptable enough to fund almost any legitimate business purpose:
Refits & renovations
Fit-out, signage, fixtures, layout upgrades
Expansion
New locations, new markets, scaling capacity
Inventory & stock
Bulk buying for campaigns or seasonal demand
Hiring & wages
Bringing on key people, bridging wage obligations
Equipment & technology
Tools, plant, specialist tech (compare equipment finance too)
Working capital
Cash buffer through growth or slow periods
Tax & compliance
Clearing ATO debt or compliance bills
Acquisition or buyout
Partial or full acquisition funding
Note on ATO debt: the general interest charge is currently 10.65% p.a. and no longer tax-deductible from 1 July 2025 — a term loan may offer a better effective rate.
When a Business Term Loan Makes Sense
Good fit
- You have a defined funding amount — you know what you need and why
- A clear repayment timeline that fits your cash flow over the term
- A specific project or purpose — expansion, refurb, acquisition, major investment
- You don't need ongoing revolving access to draw and repay repeatedly
Poor fit
- You need ongoing flexibility to draw and repay repeatedly — try a line of credit
- You're juggling multiple existing debts — consider debt consolidation first
- You're funding a single piece of equipment — equipment finance may suit better
- Revenue is too volatile to commit to a fixed repayment schedule
What to Compare When Shopping Term Loans
Don't get anchored to the headline rate. Here's what actually matters:
Interest rate vs comparison rate
The comparison rate includes most fees and gives a truer picture of total cost. Always ask for it.
Loan term
Longer terms reduce monthly repayments but increase total interest. Run the numbers both ways.
Repayment frequency
Weekly repayments often look affordable but accelerate total interest paid. Monthly repayments are easier to reconcile with invoicing cycles.
Application & establishment fees
Typically 0–3% of the loan amount. Some lenders roll this into the rate; others charge it upfront.
Ongoing fees
Monthly account-keeping fees of $0–$30/month add up over a 3-year term.
Early repayment fees
If there's any chance you'll pay off early, understand the break cost. Some lenders charge $0; others charge $450+.
Factor rates
Some short-term online lenders quote factor rates (e.g. 1.2x on a 12-month loan) instead of an APR. Convert to APR equivalent before comparing.
Director's guarantee terms
What exactly are you personally liable for, and under what conditions?
LoanGorilla compares business term loans from 40+ lenders on all of these dimensions — not just the headline rate.
Potential Drawbacks
Director's guarantee exposure on "unsecured" loans
Many borrowers are surprised to discover their supposedly unsecured term loan still carries full personal liability via a director's guarantee. If the business can't repay, your personal assets can be at risk even without a formal security registration over property.
Factor-rate confusion on short-term products
Not all term loan products are priced as APRs. Short-term fintech loans often quote factor rates — which can translate to annualised equivalents of 30–60%+ p.a. Always ask for the APR or comparison rate equivalent before signing.
Repayment rigidity during revenue downturns
Unlike a revolving facility, a term loan's repayment schedule doesn't flex if your revenue drops. Some lenders offer hardship provisions, but most don't build in automatic flexibility — stress-test your cash flow against a revenue shortfall before committing.
Eligibility Snapshot
Most business term loan lenders in Australia want an active ABN, at least 6–12 months of trading history, and evidence that your cash flow can service the repayments. Unsecured lenders focus heavily on recent bank statements and revenue trends; secured lenders additionally assess the quality and equity of the collateral.
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Rates shown are subject to change. WARNING: Comparison rates are true only for the example given and may not include all fees and charges. Always read the lender's terms before applying.