When traditional banks can't or won't help, alternative business loans provide fast, flexible funding for Australian businesses.
What Are Alternative Business Loans?
Alternative business loans are business financing from non-bank sources, offering more flexible approval criteria and faster processing than traditional banks.
Types of Alternative Business Lenders:
- Private lenders
- Non-bank lenders
- Peer-to-peer platforms
- Online lenders
- Specialist finance companies
- Invoice finance providers
- Equipment finance companies
Why Businesses Need Alternatives
Banks decline businesses for:
- Trading less than 2 years
- Recent losses (even if now profitable)
- Industry sector (hospitality, retail, trade)
- Credit defaults or late payments
- Unable to prove income fully
- Too small (under $50,000)
- Too urgent (can't wait 6-8 weeks)
- Unusual business model
Types of Alternative Business Loans
1. Private Business Loans
Security: Property or assets Rate: 8-16% p.a. Amount: $50,000 - $5M Term: 1-5 years Speed: 3-14 days
Best for: Property owners needing fast funding
2. Invoice Finance
Advance: 80-90% of invoice value Fee: 1-3% of invoice Term: 30-90 days Speed: 1-3 days
Best for: B2B businesses with slow-paying customers
3. Equipment Finance
Security: Equipment being purchased Rate: 8-15% p.a. Amount: $10,000 - $500,000 Term: 1-7 years
Best for: Buying vehicles, machinery, equipment
4. Merchant Cash Advance
Advance: $5,000 - $250,000 Factor rate: 1.1-1.5x Repay: % of daily sales Term: 3-12 months
Best for: Retailers, cafes, restaurants with card sales
5. Line of Credit
Security: Various Rate: 10-20% p.a. Access: $10,000 - $500,000 Term: Revolving
Best for: Ongoing working capital needs
Alternative vs Bank Business Loans
| Factor | Banks | Alternative Lenders |
|---|---|---|
| Approval Time | 4-8 weeks | 1-14 days |
| Trading History | 2+ years | 6+ months |
| Credit Requirements | Strict | Flexible |
| Rates | 6-10% p.a. | 8-25% p.a. |
| Security | Often required | Varies |
| Flexibility | Low | High |
Costs of Alternative Business Loans
Rate Ranges by Type:
- Property-secured: 8-14% p.a.
- Equipment finance: 8-15% p.a.
- Invoice finance: 15-36% p.a. effective
- Merchant cash advance: 20-80% p.a. effective
- Unsecured: 15-25% p.a.
When to Use Alternative Business Loans
Choose alternatives when: ✅ Bank declined application ✅ Need funds urgently (days not weeks) ✅ New business (under 2 years) ✅ Temporary cash flow gap ✅ Time-sensitive opportunity ✅ Rebuilding credit ✅ Complex business structure
Ready for alternative business funding? Connect with alternative business lenders.