Compare business loans in Australia: every loan type side by side

To compare business loans in Australia properly you need to do it in two rounds. Round one compares loan structures, because a line of credit, an equipment loan and a second mortgage are built for different jobs. Round two compares offers of the winning structure on what they’ll cost you in dollars and how they’ll behave in your bank account. This page is the master table for round one and the method for round two.

Which business loan types are there to compare?

There are about a dozen common structures, and every business loan in Australia is a version of one of them. Business.gov.au’s funding guide groups the main debt products as business loans, lines of credit, overdrafts, invoice financing, equipment leases and asset financing; property-secured and short-term options round out the list.

The master table: every business loan structure side by side

Structure	Best for	Not for	Security	Documents	Speed in words	Flexibility
Unsecured term loan	A defined job for a trading business	Long-lived assets or very new businesses	Director or owner guarantee	Bank statements, ID, ABN; more for larger amounts	Can be quick when the file is complete	Fixed schedule; check early payout
Business line of credit	Recurring or seasonal cash gaps	One-off long-term purchases	Varies; can be unsecured	Bank statements, BAS; financials for larger limits	Moderate to set up, then instant to draw	High: draw, repay, redraw
Bank overdraft	Day-to-day timing gaps for established businesses	Newer businesses or anyone without security	Often property	Financials, tax returns	Steady; bank process	High within the limit
Invoice finance	Waiting on business customers to pay	Cash or retail sales	The invoices	Debtor ledger, invoices, statements	Moderate to set up, then fast per invoice	Grows with your sales
Chattel mortgage or asset loan	Vehicles, plant, equipment you’ll own	Wages, stock or tax	The asset	Quote or invoice, statements, ID	Often quick for standard assets	Fixed; balloon options
Equipment lease	Gear you’ll upgrade regularly	Assets you want to own outright	The asset (lender owns it)	As for asset loans	Often quick for standard assets	Fixed; end-of-term choices
First mortgage (business purpose)	Large, long-term borrowing with property	Small or short needs	Registered first mortgage	Valuation, ID, purpose and capacity evidence	Weeks rather than days	Moderate
Second mortgage	Larger needs with equity behind an existing loan	Owners with little equity	Registered second mortgage	Valuation, first-lender details, exit plan	Can be quick when the file is complete	Moderate
Caveat loan	Urgent, short needs with a clear exit	Long-term borrowing	Caveat over property	Title details, ID, exit evidence	Often among the quickest secured options	Short, fixed term
Bridging loan	Buying before selling, or a refinance gap	Situations without a firm sale or refinance	Property	Contracts, valuations	Moderate	Short term
Short-term online advance	Small, short needs funded from daily takings	Long-term or lumpy cash flow	Usually a guarantee	Bank statement access, ID	Often quick	Low if the cost is fixed
Small Business Export Loan	Direct exporters missing bank finance	Non-exporters	As required by the lender	Export contracts, financials	Government process	Moderate

The government-backed export loan, administered by Export Finance Australia, lends $20,000 to $350,000 to direct exporters with an ACN, turnover above $250,000 and at least two years of trading, according to business.gov.au.

For more on each structure, see biz loans explained, our line of credit or term loan verdict and the easiest business loan to get.

How do the structures grade on our five tests?

These grades apply our five tests to each structure doing the job it’s designed for.

Structure	Total cost	Fit to the job	Security	Flexibility	Paperwork
Unsecured term loan	Fair	Strong	Strong	Fair	Strong
Line of credit	Fair	Strong	Fair	Strong	Fair
Bank overdraft	Strong	Fair	Fair	Strong	Weak
Invoice finance	Fair	Strong	Strong	Strong	Fair
Chattel mortgage or lease	Strong	Strong	Strong	Fair	Fair
First or second mortgage	Strong	Strong	Weak	Fair	Weak
Caveat or bridging loan	Weak	Strong	Weak	Fair	Fair
Short-term online advance	Weak	Fair	Fair	Weak	Strong

How do you compare business loan offers on total cost?

Compare total dollars, because there’s no standard comparison rate to lean on. Credit used mainly for business purposes sits outside the National Credit Code, so business lenders don’t have to quote one. Business.gov.au’s guide to applying for a business loan suggests comparing upfront and ongoing charges, whether pricing is fixed or variable, loan amounts, terms, security and any restrictions. Here’s how to turn that into one number per offer.

1. Ask each lender for a written cost schedule for the same amount and term.
2. Add up the total repayable: every scheduled repayment plus any fees not already included.
3. Note what you actually receive, after fees deducted from the advance.
4. Subtract. Total repayable minus amount received is the dollar cost of the loan.
5. Divide by the amount received to get the cost per dollar borrowed, and note the term, because a shorter loan with the same dollar cost is the dearer one.
6. Check timing: repayment frequency, early payout savings, and the security and guarantees asked for.

The total cost comparer does steps 2 to 5 for you, and the factor rate calculator handles offers quoted as a factor. If you’d rather hand the comparison to a specialist, start a 60-second enquiry.

Illustrative example: two offers, one decision

Illustrative only, round numbers, not market pricing. A wholesaler needs $100k for 12 months to fund a large order.

	Offer A: line of credit	Offer B: short-term advance
Amount received	$100,000	$97,000 (fee deducted)
Total repayable if used for the full term	$114,000	$120,000
Dollar cost	$14,000	$23,000
Cost per dollar received	14 cents	about 24 cents
Repayments	Monthly, interest on the drawn balance	Daily, fixed amount
Early repayment	Interest stops when you repay	Most of the cost still payable

Offer B looked simpler and arrived first. Offer A costs $9,000 less, falls further if the order pays early, and its monthly repayments suit a wholesaler paid on 30-day terms. Verdict for this owner: Offer A.

Our verdict on comparing business loans

How do you compare a secured offer with an unsecured one?

Put a value on what you’re pledging, then compare. A secured loan will often show the lower dollar cost, because the lender’s risk is lower. The unsecured offer may cost more but leaves your home or commercial property out of it. Ask yourself two questions: would losing the security be survivable if the business hit a bad year, and is the dollar saving large enough to justify that risk for this particular job? For a short, modest need the answer is often no. For a large, long-term purchase it’s often yes. Our secured or unsecured verdict works through the trade-off, and the full set of situation verdicts sits in the best business loans hub.

What else should you compare besides cost?

Price is only half the picture. The other half:

• Security. A slightly cheaper loan that needs your home may be worse than a dearer one that doesn’t.
• Guarantees. Who signs personally, and for how much.
• Covenants and reviews. Conditions that let a lender reprice or call in the loan.
• Protections. ASIC notes that commercial loans carry the lowest level of legal protection, so the contract terms do the protecting. Check whether the lender belongs to AFCA.
• Approval likelihood. The Reserve Bank’s October 2025 Bulletin found one in five SMEs had experienced challenges getting finance. The best offer is one you can actually get.

For the lowest-cost options by situation, read our verdict on the cheapest business loan, and for a deeper walk through two real-world offers, choosing between two loan offers.

Want the comparison done for you?

Comparing structures and offers is exactly what we do. Find out which loan fits and what it could look like for your business: no credit check when you first enquire, one real person working on your file, and no scattering your details across a long list of lenders. Give us accurate figures on turnover, debts and security, and we’ll compare the right options for you first time.