Unsecured business loans: what to check before you sign
An unsecured business loan is assessed on your trading — turnover, bank statements and credit score — and is usually repaid daily or weekly from the start, backed by a personal guarantee. If you own property with equity, a secured loan is generally priced well below it, needs none of that, and can come with no repayments for six months.
See if you qualify in sixty seconds. No credit check to apply, no financials, no payments for the first six months. That's the HomeSec Advantage.
See if you qualifyFive things to check before you sign an unsecured business loan
None of these is a reason never to take one. They are the questions the lender's own website is least likely to answer up front, and the ones that decide whether the loan helps the business or squeezes it.
- How it is repaid, and from when. Most unsecured and cash flow lenders take repayments daily or weekly by direct debit, starting almost as soon as the money lands. That is money leaving the account before the thing you borrowed for has had a chance to earn anything. Ask for the repayment schedule in writing and run it against your quietest month, not your best one.
- The total you repay, in dollars. Some products quote an interest rate, some quote a factor rate, and some quote neither and give you a fee and a total. The only number that compares across all of them is the total amount you will repay, in dollars, by the end. If the lender will not give it to you before you sign, that is your answer.
- Who is actually on the hook. An unsecured business loan is unsecured against the business's assets, not against you. Nearly every lender in this market takes a director's personal guarantee, which makes the debt yours personally if the business cannot pay it.
- Whether it stays unsecured above a certain size. Several lenders take a charge over company assets once the loan passes a threshold, and at least one lists caveats over land as an example of what that can include. Others want you to own property before they will lend the larger amounts at all. The details are on our page comparing what each lender requires.
- What it costs to get out early. Products priced as a fixed fee or a factor rate can cost the same whether you repay in month two or month twelve. If there is any chance you will refinance or repay early — a sale, a big invoice paid, a better loan — find out what early payout saves you, if anything.
If you own property, ask this question first
An unsecured lender has nothing to rely on but your trading and your promise, so it prices for that and checks everything about the last twelve months. A lender with a mortgage over real estate is relying on the property. That one difference changes almost everything else:
- It usually costs less. A loan secured on property is generally priced well below an unsecured cash flow loan, because the risk is lower.
- Six months to breathe. HomeSec loans can come with no repayments for up to the first six months, instead of a debit leaving the account every day or every week.
- No turnover test and no bank statements. We do not ask the business to prove it can service the loan from its takings. We ask for equity, a business purpose and a way out.
- No credit score minimum. Defaults, judgments and an ATO debt are usually okay with us. A real person reads the file — not AI and not a scorecard. More on bad credit business loans.
- Just as quick. Funding is possible in as little as 24 hours from a clean, complete scenario. We do not use valuers.
- Borrow what the property supports, not what the account shows. From $20,000 to $5,000,000, up to 80% of a residential property's value or 70% of a commercial one, less what is owing.
Unsecured loan or secured loan, side by side
| Typical unsecured or cash flow loan | HomeSec secured loan | |
|---|---|---|
| Assessed on | Turnover, bank statements, time trading, credit score | Equity in real estate and a business purpose |
| Credit score | A minimum applies, checked by a system | No minimum. A real person reads every file |
| Repayments | Daily or weekly, from the start | None for up to the first six months |
| How much | A multiple of what your account shows | Set by your equity, $20,000 to $5,000,000 |
| Documents | Bank statements, often accounting software access | Photo ID, a rates notice and a mortgage statement |
| Speed | Often same or next day | In as little as 24 hours |
| Cost | Priced for no security | Generally priced well below an unsecured loan |
Unsecured-lender characteristics are general observations from the terms Australian lenders publish; individual lenders differ, and each one's own terms are what count. Twelve of them are compared lender by lender here.
When an unsecured loan is the right call
If there is no real estate anywhere in the ownership group, a secured loan is not on the table and a good unsecured lender is the right place to go. The same is true for a small amount, needed by a business with steady takings and a clean file, that will be repaid quickly. And a business that qualifies at its own bank should start at its bank. We would rather say that here than take a call that cannot go anywhere.
Already have an unsecured loan that is squeezing you?
A secured loan can pay it out — one or several — and swap the daily or weekly debits for up to six months of no repayments. Get a payout figure from each lender, then call with the figures and the property details. See also business debt consolidation, and what to do if a cash flow lender has said no, or offered less than you need.
From the call to the money
Tell us the deal
Amount, purpose, timing, the property and how the loan gets repaid. A Lending Manager gives you an indicative answer on that call — usually in minutes.
Minutes
Conditional approval
Photo ID, a rates notice and your most recent mortgage statement. That is the whole list, and it takes about fifteen minutes.
About 15 minutes
Funds released
As little as 24 hours from a clean, complete scenario. Paid where you tell us — to your account, or straight to the ATO.
As little as 24 hours
Questions people ask before they sign
Does HomeSec offer unsecured business loans?
Is a secured business loan cheaper than an unsecured one?
Will I lose my house if I borrow against it?
How fast is a secured loan compared with an unsecured one?
I have already signed an unsecured loan. Is it too late?
When is an unsecured loan the better choice?
More on unsecured and cash flow lending, and the alternative.
Tell us what you have been offered and what the property is. We will tell you on the call whether we can do better. 1300 93 83 87, Mon–Fri, 8:30am – 5:30pm Melbourne time.
See if you qualify in sixty seconds
Three short questions, no credit check to apply and no financial statements. A Lending Manager reads it and calls you back with a real answer — not a call centre, not an algorithm.
That's the HomeSec Advantage.
Reviewed by Paul Stone, Joint Chief Executive