Best Short-Term Business Loans Australia
We’ll help you get the best rate you can on a short-term business loan.
How Lend can help you with short-term business finance
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We work with lenders across Australia and we’re confident we can help any business find short-term finance to match their needs.
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How to get a short-term business loan
A short-term business loan can provide the money to smooth out temporary shortfalls in your working capital, cover unexpected expenses or fund a time-sensitive growth opportunity.
To access this kind of funding you’ll need:
- An ABN/ACN and GST-registration
- To have been trading for at least 6 months
- At least $75k in annual revenue
- A clear purpose for the loan and business justification
- A credit score rating over 400
- Business bank statements that the lenders can analyse to ascertain serviceability.
If you can tick all of these boxes, you’re ready to submit an application to a lender. This process can be completed in minutes, with conditional approval within hours.
If your application for a short-term loan is unconditionally approved, you could have the funds available the same business day.
What exactly is a short-term business loan?
A short-term business loan is generally classified as finance that can be repaid quickly, usually in a period of between 1 and 36 months. Short-term business loans come in two categories — fixed-term loan or ongoing line of credit.
Either could be suitable depending on the needs of the business, but they work very differently so it’s important to choose carefully.
Either way, interest rates for short-term loans are typically fixed, ranging from 10% p.a. based on your credit profile and credit eligibility.
Short-term business loan options
1. Unsecured business loan
An unsecured business loan is a common type of short-term finance for small businesses. Unlike a secured loan, you don’t need to provide collateral like property or other assets as security for the loan. This means the application process is generally very quick.
Loan terms on unsecured finance usually range between 6 months to 36 months with some providers going to 60 months.This allows businesses to cover temporary cashflow fluctuations without being tied to a lengthy finance contract.
The exit fees associated with these loans can also be very preferential to the borrower in that there are often no fees payable to exit the facility after a certain part of the loan has been repaid.
According to Lend’s proprietary data, the median loan amount requested for an unsecured business loan is $134,000, but facilities are available from $10,000 to upwards of $1,000,000.
Even though the finance is not secured by an asset, you may be required to provide a personal guarantee for your short-term business loan, which makes you ultimately responsible for the debt.
2. Business line of credit
A business line of credit or overdraft is a revolving credit facility that allows you to draw down funds as you need, up to a predetermined limit. Usually, you’ll pay a facility fee and then interest on the amount drawn down only. Additionally, you’re also able to pay off the outstanding balance when you wish with no penalty.
This is a popular short-term finance option for business, as you can access the funds almost instantly and at any time once the line is set up. If you regularly purchase stock, have payment terms with your clients and/or suppliers, this type of facility can really help remove the speed bumps in your businesses cashflow.
Interest rates on lines of credit and overdrafts are the same if not identical to business loans in the current lending environment, but they offer much more flexibility. You can use a line of credit for any genuine business expense, although access to working capital and expansions are the most common purposes.
3. Invoice finance
If you offer credit terms to your customers, invoice finance (or invoice factoring/debtor finance) can boost your short-term cashflow without requiring you to take on debt.
It’s effectively a cash advance or line of credit secured against your outstanding invoices. It involves selling your accounts receivable to a factoring company (or factor), which advances you up to 90% of their value.
Once your customers pay their invoices, the lender deducts their fees and charges from the balance of the invoice once paid.
Most businesses engaging in this style of product often pass a portion or most of the cost of the finance onto their clients who require payment terms. As these products are priced sharply, this cost is minimal vs a traditional business loan.
According to Lend data, the top industries that use invoice factoring include construction and trades, transport, mining and wholesale/retail. This option accelerates cashflow in the short term without taking on debt.
4. Business credit cards
Many people associate credit cards solely with day-to-day business expenses, but they can also be a very effective way to access short-term finance for larger costs. The beauty is that most businesses already have a credit card, so in some cases the access to funds already exists or you can simply speak to the provider about extending your credit limit (usually up to $100k).
You generally have up to 55 days to pay off any purchase interest-free, or you can revolve the balance if needed. Just bear in mind that interest rates on business credit cards are usually high – often in excess of 20%.
Four key considerations with short-term loans for business
1
They’re not suitable for capital expenditure
Be aware that short-term business loans should not be used to purchase major assets in most circumstances. However, for highly specialised assets, this could be a way to still finance the asset where traditional asset financiers say “no” to the asset.
2
Short-term business loans have a set duration
There’s no guarantee of getting a short-term business loan renewed at the end of the initial term. For example, if your business has had a downturn since it was last assessed, this will affect the assessment the second time around.
3
Interest rates on short-term loans are typically fixed
Your rate will usually remain the same for the loan's entire term, or may be fixed for a period of time (e.g. business line of credit or overdraft).
4
Short-term business loans are more expensive
Short-term loans generally come with higher interest rates compared to standard business loans. Additional fees also apply, so it's important to calculate your business loan's cost before entering into any formal agreement.
Bank vs non-bank lender: Which is best for a short-term business loan?
Non-bank lenders offer benefits that can be particularly useful to small businesses. Firstly, they often have a quicker approval process and offer more flexible terms. This allows enterprises to cover cashflow fluctuations or access immediate funding without getting stuck paying interest in the long term.
Secondly, non-bank lenders tend to be more risk-tolerant than traditional lenders. They may be willing to offer finance to businesses that wouldn't otherwise qualify for a traditional business loan. This is usually because of an insufficient trading history, lack of collateral, bad credit, or the industry in which they operate.
Finally, non-bank lenders often have a wider variety of products that can be accessed from the same initial assessment. This provides the business to potentially secure a short term business loan but also vehicle finance in the same application.
Structuring your business loan
1
How will this Finance help?
In achieving this funding what problem does it solve and/or what income can I generate as a result?
2
What is my budget?
What is my budget for a weekly, fortnightly or monthly repayment for the funding in question?
3
Exit strategy?
What is my exit strategy for the loan should it be more aligned to a short term purpose?
4
What product type best suits your needs?
Should I get a short term product or invest in getting a product that can solve problems for my business over the medium to long term?
ATO payment plans and refinancing with a business loan
As of July 1st 2025, the ATO has announced that payment plans will no longer be tax deductible for Australian small businesses.
What does this mean?
1. Financing your outstanding ATO debt can enable you to offset the interest cost in your next tax return.
2. In clearing the ATO debt your business will now be eligible for more prime products and as a result will be able to access cheaper finance in future applications.
3. The payment terms on a business loan can be stretched out but you could also choose to roll it into a line of credit and pay it off at a pace that suits your business.
Compare short-term business finance options
Loan type | Description | Amount | Interest rates from | Term |
|---|---|---|---|---|
Unsecured business loan | Fixed-term loan repaid in regular payments | $5K - $2m | 10% p.a. | 3-60 months |
Business line of credit | Access extra funds when you need and only pay interest on what you borrow | $5K - $2M | 10% p.a. | 3 month to 60 month terms structured as an evergreen limit |
Invoice finance | Get some of the value of your unpaid invoices upfront | $10k-$20m. 80-90% of the value of invoice | 2% of the invoice value | 30-120 days in line with your payment terms |
Business credit card | Flexible source of cashflow with interest-free periods, rewards etc. | $10K - $500K | 15-25% p.a. | Ongoing credit facility with interest-free period (0-55 days) |