Choosing the Right Business Finance: What Every Australian SME Should Know
Finding the right finance for your business isn’t just about low rates — it’s about matching your funding solution to your goals. Whether you need working capital, are buying equipment, or want a flexible way to manage cash flow, there are finance options to suit nearly every business scenario.
In this guide, we break down the most effective types of business finance available to Australian SMEs in 2025 — including what each option is best suited for, and what to consider before applying.
Understanding the Core Business Finance Options
1. Unsecured Business Loans – Fast, Flexible, and No Security Required
- Ideal for: Quick access to funds for growth, stock purchases, or cash flow
- Loan size: $5,000 to $500,000
- Terms: 3 to 36 months
- Security: Not required
If your business needs funding quickly — and you don’t want to offer collateral — an unsecured business loan could be the solution. These loans are fast to arrange and flexible in how you use the funds.
Benefits:
- Approval within 24–72 hours
- No need for asset security
- Funds can be used for any business purpose
Considerations:
- Higher interest rates (typically 10%–30%)
- Shorter repayment terms
2. Business Line of Credit – Flexible Funding When You Need It
- Ideal for: Seasonal cash flow or ongoing operating expenses
- Facility size: $10,000 to $250,000+
- Repayments: Only on the funds you use
A business line of credit provides ongoing access to capital that you can draw down and repay as needed. This revolving facility is ideal for businesses with fluctuating expenses or irregular revenue.
Benefits:
- Reusable credit limit
- Interest only on the amount used
- Ideal for short-term needs or seasonal gaps
Considerations:
- Monthly fees may apply
- May require a strong financial and trading history
3. Business Overdraft – A Safety Net for Day-to-Day Cash Flow
- Ideal for: Covering shortfalls or managing daily transactions
- Amount: $5,000 to $100,000
- Access: Linked to your business transaction account
Overdrafts activate automatically when your bank balance dips below zero, helping you manage unplanned expenses or late-paying clients.
Benefits:
- Automatically available when needed
- Easy access via your bank account
- Supports short-term liquidity
Considerations:
- Interest rates can be high
- Funding limits may be smaller than other facilities
4. Equipment Finance – Invest in the Tools That Power Your Business
- Ideal for: Acquiring vehicles, machinery, or business equipment
- Structure: Chattel mortgage, lease, or hire purchase
- Security: The equipment or asset being financed
Equipment finance enables you to acquire essential business assets without draining your cash reserves. Whether it’s plant equipment, vehicles, or specialised tools, the financed asset usually acts as security.
Benefits:
- 100% finance options available
- Potential tax deductions
- Preserves working capital
Considerations:
- Limited to asset purchases
- Asset may be repossessed if repayments are missed
5. Invoice Finance – Unlock Cash from Outstanding Invoices
- Ideal for: Businesses waiting on large or slow-paying client invoices
- Advance: Up to 90% of invoice value
Invoice finance lets you access funds tied up in unpaid invoices. It’s well suited for B2B businesses with lengthy payment cycles.
Benefits:
- Improves cash flow without additional debt
- Grows as your sales volume increases
- Ideal for trades, agencies, and wholesalers
Considerations:
- Service or factoring fees apply
- Best suited to businesses with consistent invoicing
6. Secured Business Loans – Lower Rates for Larger Funding
- Ideal for: Long-term investments or large purchases
- Loan size: $50,000 to $5 million+
- Security: Property, vehicles, or business assets
A secured business loan offers better interest rates and longer terms. While it does require asset valuation and documentation, it’s ideal for major business investments.
Benefits:
- Lower interest rates (typically 6%–10%)
- Higher borrowing limits available
- Suitable for long-term growth initiatives
Considerations:
- Involves asset appraisal and longer setup time
- Collateral is required and at risk
Business Finance Comparison Summary
| Finance Type | Security Required | Approval Speed | Best For |
Considerations |
| Unsecured Loan | None | Fast | Short-term needs, growth | Higher rates, shorter terms |
| Line of Credit | Varies | Moderate | Flexible cash flow | Monthly fees, eligibility needs |
| Business Overdraft | Usually | Fast | Daily cash shortfalls | Smaller limits, higher interest |
| Equipment Finance | Asset | Fast | Tool and equipment purchase | Asset security, repayment terms |
| Invoice Finance | None | Moderate | Accessing unpaid invoices | Service fees, invoicing cycle needs |
| Secured Business Loan | Asset | Slower | Long-term, large-scale funding | Collateral and processing involved |
Why Work with Lyft Money?
Choosing business finance shouldn’t be complicated. At Lyft Money, we help you:
- Compare products from more than 40 Australian lenders
- Customise solutions based on your sector, business stage, and goals
- Save time with supportive advice and personalised strategy
- Avoid mismatched funding that could limit your growth
Need Help Choosing the Right Business Loan?
We’d love to show you how easy it can be to get the financing you need. Let us do the legwork — so you can focus on growing your business.