Business loans in Australia: equipment finance, working capital and brokers (2026)

The main types of business finance

Good to know: Non-bank lenders are finance companies without a banking licence. business.gov.au notes they may charge higher interest rates and fees¹.

Equipment and vehicle finance

How each type is treated for tax is different. An accountant can explain how it would apply to your business. If the purchase is under $20,000, read about the instant asset write-off.

• Hire purchase. You pay a deposit, then instalments plus interest, and own the asset after the final payment³.
• Chattel mortgage. Similar to hire purchase, but the business owns the asset from the start and makes regular payments on the loan³.
• Lease. Banks offer equipment leases, where you pay to use an asset¹.
• Balloon payment. Some agreements end with a final lump sum payment³. Check whether yours does, and how large it is, before you sign.

Working capital and cash flow finance

Working capital is the cash available to a business for day-to-day expenses³. When money coming in and money going out do not line up, businesses use overdrafts, lines of credit, invoice (debtor) finance or trade credit to bridge the gap¹³⁴. ASBFEO's funding guide also lists trade finance, floorplan finance, unsecured term loans and merchant cash advances⁴.

Each works differently and costs differently. business.gov.au suggests comparing upfront and ongoing charges, interest rates, loan amounts, terms and whether security is needed².

What lenders ask for

1. Identification and a business plan, plus financial reports including cash flow statements if you have them, and financial forecasts².
2. Lease agreements and personal financial information².
3. Books in order and personal and business finances kept separate. ASBFEO's guide suggests ideally six months of bank statements with no overdraws or defaults, and checking your ATO record⁴.
4. Your credit ratings, personal and business. ASBFEO notes that multiple applications can have a negative impact on your credit rating⁴.
5. What you can offer as security, and who would be guarantor². ASBFEO also suggests reviewing what is registered against the business on the Personal Property Securities Register (PPSR)⁴.

Good to know: If a lender declines your application, business.gov.au suggests asking the lender for feedback².

Security and personal guarantees

A lender may ask for security, or for someone to act as guarantor². A guarantor agrees to repay the loan if the borrower cannot, and may have to repay the entire debt, including interest and fees⁷. If your home is used as security, the lender may sell it to recover the debt⁷⁴.

Moneysmart says to get independent legal and accounting advice before you sign a guarantee for a business loan⁷.

What a business finance broker does, and how they are paid

A broker does not provide any funding. They work with you and a group of lenders to find a loan¹, can recommend loan options and handle most of the paperwork², and can help match a business with suitable lenders⁴.

Brokers are generally paid a commission by the lender, and some also charge you a fee on top. ASBFEO's guide suggests asking these questions before you start⁴:

• Do you specialise in helping business owners?
• What experience do you have in my industry, and how have you helped similar clients?
• Do you charge fees on top of the commission you get from the lender?
• Who are the main lenders you work with, and why?

Good to know: No official source publishes a typical business loan interest rate or a typical broker commission, so FIZO does not quote one. Rates, fees and commissions are set by each lender and broker. Ask for them in writing.

What the law covers, and what it does not

The National Credit Act covers credit that is mainly (more than 50%) for personal, domestic or household purposes. Credit that is mainly for business purposes is generally not regulated by it, and loans to companies are not covered at all⁵. One exception: a loan to an individual to buy or improve a residential investment property is covered⁵.

That has practical effects. Lenders that only provide commercial loans do not need an Australian credit licence and do not have to belong to the Australian Financial Complaints Authority (AFCA)⁶. Mortgage brokers arranging home loans must act in your best interests⁹, but that duty comes from the consumer credit law, so do not assume a broker arranging a business loan owes you the same duty. Ask what licence they hold and what dispute scheme they belong to.

If the lender is an AFCA member, a small business with fewer than 100 employees can take a complaint to AFCA⁶. ASIC does not resolve private disputes about commercial loans except in limited circumstances, and suggests independent legal advice⁶.

If repayments are getting hard

The Small Business Debt Helpline (1800 413 828) is free and run by Financial Counselling Australia⁸. The Australian Small Business and Family Enterprise Ombudsman can help with disputes with banks or lenders⁸. If tax debts are part of the picture, read what to do about an ATO debt.