Which banks offer unsecured business loans?
Banks in Australia are risk-averse, which means it’s harder to get an unsecured loan with them. They would much prefer you to get a secured loan so that there’s a risk for your business, but not to them.
Even if you do find a bank that offers unsecured business loans, you’ll usually find it tough to get the finance you need quickly for two reasons.
1) Their lending criteria are very tough, especially post COVID-19.
Banks are still going to be gun-shy to approve unsecured business even with government incentives to try and stimulate business lending post-COVID-19. They won’t relax their lending criteria because their number one priority is their shareholders, not their business loan customers. Unsecured business loans post-COVID and post the Banking Royal Commission will be just as hard to get, especially small business loans.
Evidence of this is the very low bank take-up rate of the federal government’s $40 billion SME Guarantee Scheme. This Scheme was supposed to stimulate bank approvals for unsecured loans. However, within the first 6 months of the Scheme, Australian banks had only approved $1.5 billion worth of the $40 billion worth of funds on offer. That’s less than 5% of total funds approved, and it’s a direct result of banks’ tough lending criteria.
2) Their application process is time-consuming.
Some banks can take up to two months to assess an unsecured business loan application! In the fast-paced and global business world we live in today, that’s simply not good enough.
Banks usually require detailed financial statements, reports and business plans when you apply. The process itself can be enough to put you off. We know that your time is valuable so we won’t waste it.