Who are unsecured SME facilities for?
Unsecured business funding suits established businesses that:
- have been trading for six months or more, and ideally much longer
- have steady turnover visible in their business bank account
- need funding quickly or for a relatively short purpose
- do not own property, or prefer not to offer it as security
Because there is no mortgage involved, the lender relies on the business’s cash flow. That is why turnover and bank statements drive the decision.
Loan or line of credit?
| Feature | Unsecured loan | Line of credit |
|---|---|---|
| How funds are provided | Lump sum | A limit you draw on as needed |
| Repayment | Regular scheduled repayments | Repay what you have drawn; redraw later |
| Best for | A single purpose with a known cost | Recurring or uncertain cash flow needs |
| Typical uses | Equipment deposit, a tax bill, a marketing push | Debtor gaps, seasonal stock, contract mobilisation |
A line of credit behaves like a standby facility. For a business with lumpy receipts, such as a contractor waiting on progress payments or a wholesaler with large customers on long terms, it can be more efficient than borrowing a lump sum that sits idle.
How is the amount decided?
Lenders analyse your recent business bank statements and look at:
- Average monthly deposits, which indicate turnover.
- Consistency, including how the account behaves in quieter months.
- Existing commitments, such as other loan repayments and regular large debits.
- Account conduct, including dishonours and how often the account runs close to zero.
Weaker credit history is considered. A strong, consistent bank account can outweigh an old blemish. Decisions are sometimes made the same day once statements are provided.
What does it cost?
Unsecured lending generally costs more than property-secured lending because the lender carries more risk, and pricing varies widely between providers. Every facility is priced on the business’s own circumstances. We compare the options available for your situation and put forward the sharpest one we can find, showing all costs clearly before you commit.
When is property security the better choice?
If you need a larger amount, a longer repayment period or have had a difficult credit history, a property-secured loan may be cheaper and more flexible. Property-secured loans run from $20,000 to $1m, can be a second mortgage behind an existing home loan, and do not need financials for the initial assessment.
Using unsecured credit well
- Match the facility to the purpose. Use a line of credit for fluctuating needs and a term loan for one-off costs.
- Watch repayment frequency. Some unsecured products repay weekly or even daily; make sure that suits your cash cycle.
- Avoid stacking. Taking several unsecured loans from different providers is a common route into trouble. If that has already happened, consolidation may help.
- Keep statements clean. Fewer dishonours and a steady balance improve future options.
Our guide on how lenders assess an established SME explains what a credit analyst looks for in bank statements.
Questions SME owners ask
How long does my business need to have been trading?
Usually six months or more. Established SMEs with several years of trading tend to have more options because their bank statements show a longer pattern.
What documents do I need?
Business bank statements are the core document, because they show actual turnover and how the account behaves. Some lenders also ask for GST returns or management accounts for larger amounts.
What is the difference between an unsecured loan and a line of credit?
A loan is drawn in full and repaid on a schedule. A line of credit gives you a limit you can draw on, repay and draw again, so you only use funds when needed.
Will a personal guarantee be required?
Unsecured business lending commonly involves a guarantee from directors or owners, even though no property is mortgaged. Your lending specialist will explain exactly what each option requires.
Can I have both an unsecured facility and a property-secured loan?
Yes. Some businesses use a property-secured loan for a large one-off purpose and an unsecured line of credit for day-to-day cash flow.