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Last reviewed: 31 October 2026 · Written by John Pierre Saliba, Director, OverdraftMe
An unsecured business loan is a fixed-term loan with no property or asset pledged as security. Australian SMEs can borrow $10,000 to $150,000 unsecured through non-bank lenders, and up to $500,000 case by case. Lenders assess 6 months of bank statements, rates run 14.55% to 25% p.a., and decisions come from 1 hour.
Reviewed by John Pierre Saliba on 31 October 2026. Indicative only, subject to lender assessment.
Why does an unsecured business loan cost a bit more? No property security means a slightly higher rate. Options based on 6 months of business bank statements, for Australian businesses with an ABN.
John Pierre Saliba, Director, OverdraftMe. More short answers on YouTube
An unsecured business loan is finance where no specific asset is pledged as security. The lender assesses the application on the strength of the business, meaning revenue, trading history and credit conduct, rather than on the value of an asset you put up. If the business defaults, the lender cannot claim a property or vehicle, because none was ever attached to the loan.
That is the opposite of a secured loan, where the lender registers an interest over property or another asset and can recover it on default. Unsecured business lending in Australia is dominated by non-bank lenders who assess 6 months of bank statements with technology and give decisions from 1 hour. Banks mostly reserve unsecured lending for existing customers with full financials.
Two things still apply. A personal guarantee from the director is standard, and the lender usually registers a general security interest over the business on the PPSR (the Personal Property Securities Register) rather than over any named asset. Neither puts your home at risk unless the business fails and the guarantee is called.
Not sure whether you need a loan or an overdraft? One application through OverdraftMe is assessed for both. There is no cost to you: the lender pays our fee on settlement.
Non-bank lenders on the OverdraftMe panel apply the same core criteria to unsecured business loans, with the loan sized on your monthly deposits. Every file is assessed case by case.
| Criterion | Guide | Notes |
|---|---|---|
| Trading history | ABN active and trading 6+ months | Strong 6-month files are funded regularly. Longer history unlocks larger limits and sharper pricing. |
| Monthly revenue | $6,000+ deposited into the business account | Loans are typically sized at one to two months of turnover. |
| Credit score | Equifax 550+ | Paid defaults and a managed ATO payment plan are generally acceptable. See what credit score you need. |
| Property | Not required under $150,000 | Above $150,000, property ownership is generally expected, even when it is not mortgaged. |
| Documents | 6 months of bank statements, ABN, driver's licence | No tax returns, BAS or financials under $150,000. See documents needed. |
| Structure | Company, trust, partnership or sole trader | Sole traders are assessed on the same basis as companies. |
Unsecured business loan interest rates through the OverdraftMe panel run from 14.55% to 25% p.a., depending on your credit score, trading history, monthly revenue and the loan term. That is higher than a bank loan secured by property, and the reasons are structural: no asset to recover, a decision in hours rather than weeks, and no financials to prepare. The trade-off is explained in why unsecured business loans cost more.
| Lender type | Rate range | Security | Time to decision |
|---|---|---|---|
| Bank, secured term loan | 6% to 12% p.a. | Property or other asset | 2 to 6 weeks, full financials |
| Non-bank unsecured business loan (OverdraftMe panel) | 14.55% to 25% p.a. | None. Personal guarantee only | From 1 hour on bank statements |
| Non-bank unsecured overdraft or line of credit | 14.55% to 25% p.a. on the drawn balance plus a 0.5% to 2% p.a. line fee | None. Personal guarantee only | From 1 hour on bank statements |
| Merchant cash advance | Factor rate, for example 1.25 (about 90% APR equivalent over 6 months) | Future card sales | Same day |
Indicative only and subject to lender assessment. Panel ranges reflect the OverdraftMe lender panel; bank and merchant cash advance figures are market context. Some lenders charge an establishment fee, which we disclose before you sign.
At an indicative 18% p.a. on a reducing balance, a $50,000 unsecured business loan repaid weekly over 12 months costs about $1,052 a week, which is roughly $4,721 in total interest and $54,721 repaid in all. At the 14.55% p.a. panel floor the same loan is about $1,035 a week and $3,795 in interest. Interest on a business loan used for business purposes is tax deductible, so at the 25% base rate entity tax rate an 18% rate effectively costs 13.5%. Model your own figures in the business loan calculator.
Want a real quote rather than an estimate? The 2-minute eligibility check has no credit impact, and a broker calls within the hour.
Both products are available without property security and on the same documents. The difference is structure, and it decides what you pay.
| Unsecured business loan | Unsecured business overdraft | |
|---|---|---|
| Structure | Lump sum, fixed repayments | Revolving limit: draw, repay, redraw |
| Interest charged on | Full balance from day one, reducing as you repay | Drawn balance only, plus a line fee on the limit |
| Term | 3 to 36 months | 12-month facility, renewable |
| Best for | One-off known cost: equipment, fitout, stock, debt consolidation | Recurring gaps: wages, BAS, supplier terms, seasonal dips |
| Reapply each time? | Yes, for each new need | No, the limit resets as you repay |
| Indicative panel rate | 14.55% to 25% p.a. | 14.55% to 25% p.a. on drawn balance plus 0.5% to 2% p.a. line fee |
When the loan fits: you know the amount and the purpose, and you want the certainty of a fixed repayment that ends on a set date.
When an overdraft is better: the need is recurring or unpredictable, so paying interest only while funds are drawn beats paying on a full lump sum for the whole term. Compare in detail in business overdraft vs business loan, or see how the two combine on the working capital loan page.
Every facility OverdraftMe has settled is unsecured. Two recent examples from the settled transactions record show what the same lender panel approves on bank statements alone:
Both were structured as revolving unsecured facilities because the need was recurring. The same assessment applies when a fixed-term unsecured business loan is the better fit.
An unsecured business loan is a lump sum repaid over a fixed term, usually 3 to 36 months, with no property or other asset taken as security. The lender assesses the business itself: revenue, trading history and credit conduct from 6 months of bank statements. A personal guarantee from the director is standard. Through the OverdraftMe panel, unsecured business loans run from $10,000 to $150,000 as standard and up to $500,000 case by case.
Most non-bank lenders cap unsecured business loans at $150,000 per lender, sized on your monthly revenue (typically one to two months of turnover). Stronger profiles with longer trading history and consistent deposits are considered for unsecured facilities up to $500,000 case by case. Above that, property ownership is generally expected, even if the property is not mortgaged upfront.
Through the OverdraftMe panel, unsecured business loan rates run from 14.55% to 25% p.a., set by your credit score, trading history, monthly revenue and loan term. Bank loans secured by property sit around 6% to 12% p.a. but need full financials and usually property. Some lenders quote a factor rate instead of an interest rate: convert it with the factor rate to APR calculator before you compare.
Because the lender carries the risk with no asset to recover if the business fails, and because non-bank lenders fund decisions from 1 hour on bank statements rather than weeks of financial analysis. You pay for speed, for no property on the line and for a simpler process. The full breakdown is in why unsecured business loans cost more than bank loans.
Yes, in almost every case. Unsecured means no property or asset is taken as security, not that nobody is responsible. The director signs a personal guarantee, which only comes into play if the business cannot repay. It does not appear on your personal credit file unless the lender has to call on it. See how personal guarantees work on business loans.
Yes. Under $150,000, non-bank lenders on the OverdraftMe panel assess 6 months of business bank statements, an ABN and a driver's licence. No tax returns, BAS or financial statements are needed. Full detail in business loans with no tax returns.
Decisions come from 1 hour of lodgement for straightforward files, and funding lands same day in many cases, typically within 24 to 48 hours of approval. The fastest files have 6 months of statements ready as PDFs, a clean ABN and ID, and a clear purpose for the funds. If speed is the priority, see fast business loans.
Choose the loan for a one-off, known cost such as equipment, a fitout, stock for a season or consolidating debt: you get a lump sum and fixed repayments. Choose the unsecured business overdraft for recurring, unpredictable gaps such as wages before invoices land, because you draw, repay and redraw and pay interest only on the drawn balance. Many businesses run both.
Often, yes. Non-bank lenders consider unsecured business loans from an Equifax score of 550, and weigh revenue consistency more heavily than the score. Paid defaults and a managed ATO payment plan are generally acceptable. Expect pricing at the upper end of the 14.55% to 25% p.a. range. See business finance with bad credit.
The unsecured business loan market in Australia is led by non-bank lenders such as Prospa, Moula, Lumi, Shift, Bizcap, Banjo and Dynamoney, plus 40 or more smaller specialists. Each has different sweet spots for loan size, trading history, industry and credit profile. OverdraftMe compares 50+ of them on one application with one credit enquiry, and the lender pays our fee on settlement, so the service is free to you.
Yes. Sole traders are assessed on the same basis as companies: an ABN trading 6 months or more, $6,000 or more in monthly deposits and an Equifax score of 550 or above. The loan is in your name as the trading entity, so the personal guarantee and the loan are effectively the same obligation. See business finance for sole traders.
Under $150,000: 6 months of business bank statements (PDF or bank-feed link), your ABN and a driver's licence. Above $150,000, or for stronger pricing, lenders may ask for recent BAS, a current ATO portal statement or financials. Have the statements ready before the broker call and a same-day decision is realistic.
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