Top Business Loans of 2020
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Top Business Loans of 2020

Katelyn Martiri

Katelyn Martiri

26/03/2021 • 8 minute read

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Operating a business is an exciting, but sometimes challenging feat; in the midst of selling products and/or services, paying employees, and ensuring you make profits instead of losses, you may find yourself in need of a little financial help. Whether start-ups or large corporations, businesses sometimes need to borrow a lump sum of money to help advance their offering and better serve their customers. There’s no shame in doing this — in fact recognising you need a little boost to get things going in the direction you want is great. It means you’re serious about what you’re doing and actively seeking to improve.

If you find yourself in need of some extra cash, consider taking out a business loan. To make the process a little easier, we’ve covered a few basics to help answer your questions.

What is a business loan?

Business loans have a similar nature to personal loans; the only difference is that they’re designed specifically for business endeavours. From getting a business up and running, traversing through a rough patch, purchasing inventory, or scaling up, business loans can be used for a variety of reasons. As a business owner, the loan you apply for is dependent on what you need it for and your current financial situation, so it’s important to do your research beforehand to ensure you’re acquiring one that’s suitable for you and your business.

Typically, business loans are paid back over an agreed period of time and will usually accrue interest (fixed or variable) on the principal loan amount. They will also be either secured or unsecured.

Secured business loans require you to establish a form of security or asset that backs up the loan as collateral, allowing you to apply and gain the approval of larger amounts. Unsecured loans, on the other hand, don’t require an asset or collateral as security so usually involve smaller amounts of money that can be attained faster than its counterpart.

The pros and cons of a business loan

Like anything, business loans have their benefits and their downfalls. It’s important to weigh up the two before applying for a loan, so you know what to expect and aren’t met with any unpleasant surprises.

Here’s a rundown of the pros and cons of taking out a business loan:


  • Unlike investors, lenders aren’t set up to suggest how you should run your business. As long as you pay back your loan (and accumulated interest) as negotiated, they’re not concerned with how you spend your money. This is desirable for business owners who want to maintain full control of their business and how it develops.
  • Many business owners take out a loan because they want to grow their business and increase their profitability. Taking out a business loan, rather than borrowing equity, ensures any money you make (in the way of profits) remains yours.
  • You don’t have to be a large corporation to take out a business loan—start-ups can too. Granted, larger traditional lenders tend to be a little more reluctant in approving start-up business loans, but it’s not impossible to find a smaller lender willing to help you out.


  • Not every business will qualify for a loan, as there are hard and fast conditions that need to be met for approval success. To give yourself the best chance of approval, ensure your application is thorough and has everything you need to be considered for the loan. Some documentation you may need include: businesses licenses, bank statements, financial projection, financial statements, and leases.
  • If you take out a secured loan and fail to make your repayments, your designated asset may be seized. This is something to be aware of before making any sort of application.
  • If you apply for a business loan with a bank, they may only grant a portion of the money you’ve requested. This can be frustrating if you’ve devised a business plan based on the entire sum you applied for, and you’ll have to go back and cut costs/find alternative ways to carry out your plans more affordably. Again, this is something to be mindful of when applying for a business loan.

Top business loans of 2020

In the past, applying for a business loan involved piles of paperwork and agonising waiting times. In 2020, it’s quite the opposite; business owners can apply for a loan, get approved, and access their funds in as little as a day—thanks to online lenders offering quick and easy processes.

While the number of hours spent applying for a loan has decreased, the number of lenders hasn’t. With a sea of lenders in the financial market, it can be a bit overwhelming to sift through them all and figure out which one is best for you and your business.

To make your search easier, we’ve compiled a list of the seven top business loans of 2020. Read on to discover who they’re with and what they’re all about.

1. Prospa 

Loan Amount: $5,000 – $300,000

With the vision of changing the way that small business owners experience finance, Prospa has helped over 28,000 businesses seize opportunities and support cash flow.

Prospa’s Small Business Loan involves a 3 – 36 month term, daily or weekly repayments, and an early payout option. You can apply for Prospa’s Small Business Loan in just ten minutes, and the funding can be in your bank account within 24 hours. This easy application process and fast turnaround means business owners can start making their goals a reality right away.

To apply for Prospa’s loan, you must have been trading for a minimum of 12 months and be willing to demonstrate monthly turnover figures.

Prospa is supported by the Government’s Coronavirus SME Guarantee Scheme.

2. Unsecured Finance Australia

Loan Amount: $5,000 – $300,000

As the name suggests, Unsecured Finance Australia offers unsecured business loans to customers. They are dedicated to making the process of obtaining an unsecured business loan simple, and providing small business owners with the funds they need to realise their dreams.

Their loans are set on 3 – 24 month terms, and come with top-up and early payout options.

A five minute application and basic documentation is all it takes to apply for this unsecured business loan. But there are a few requirements you have to meet to apply: you must have been operating for at least six months (this can be lowered to three in special circumstances), have an ABN and online bank account, and be generating a minimum turnover of $60,000 per year.

3. Lumi

Loan Amount: $5,000 – $200,000

Lumi is a small business offering other small businesses a quick and easy loan solution.

Supported by the Australian Government Coronavirus SME Guarantee Scheme, Lumi has flexible unsecured loans with 3 – 18 month terms. To get the funding you need fast, spend a few minutes applying online, wait two hours for a lending outcome, and (if approved) you’ll see the money in your bank account on the next business day.

Lumi is proud to have no hidden fees, and to be a member of FinTech Australia.

4. OnDeck

Loan Amount: $10,000 – $250,000

Using cutting-edge technology to evaluate business performance rather than personal credit scores, OnDeck is solving an issue a lot of small businesses face: efficient access to capital.

Their short-term business loans are flexible, ranging from 6 – 24 months with weekly and daily automatic payment options.

To be eligible for OnDeck’s Small Business Loan, you must have a minimum of:

  • $100,000 gross annual turn over
  • One year in business
  • Six monthly deposits
  • 50 credit score
  • Plus, no experience with bankruptcy

5. Banjo

Loan Amount: $20,000 – $500,000

Banjo lends money to small and medium sized Australian businesses in a more holistic manner.

Instead of solely looking at assets or collateral when considering an application, they also consider business activity and various sources of industry data to gain a different insight into a business’ position. This allows them to approve more loans, while still lending responsibly.

Banjo’s loans are unsecured and set on 6 – 24 month terms. The easy application process involves filling out a ten minute application, being reviewed and approved within a couple of hours, and putting the funds into your account within 24 and 72 hours.

To be eligible for a Banjo loan, you must have been operating your business for a minimum of two years and have at least $500,000 pa in revenue.

6. Moula

Loan Amount: $5,000 and $250,000

Moula is a lender that doesn’t view businesses by size, but by value. They use data insights (from your banking or accounting information) to determine how much your business can lend over 12 – 24 months.

You are eligible to apply for a Moula business loan if you have an active ABN or ACN, are registered for GST, have been running your business for at least six months, and produce at least $5,000 in monthly sales.

To apply for a Moula loan, simply fill out some basic business and personal information and link your online banking or accounting data; once approved, you’ll receive the funds fast.

7. Zip

Loan Amount: $10,000 – $500,000

Lastly, we have Zip—a lender that offers unsecured business loans promptly and thoroughly.

If you own an Australian business that creates an annual turnover of $200,000+ and have been trading for at least 18 months, you’re eligible to apply for a Zip Business Loan. The best thing about this loan is that you only need to pay interest on what you use.

Terms are between 1-36 months.

Looking for more info on business loans?

Check out some of our recent articles!

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The Australian Government has an online resource that may also come in handy when you apply for a business loan.

Oiyo is a consolidated online resource, we are not financial advisors. We work with a range of industry professionals and compliance check our articles to ensure factual accuracy. However, we do not provide professional financial advice. Consider seeking independent legal, financial, taxation or other advice to check how the information and ideas presented in this article relate to your unique circumstances.

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Katelyn Martiri

Written by Katelyn Martiri

Katelyn Martiri is a contributing writer at Oiyo. She holds a Bachelor of Journalism (minoring in writing) from the University of Queensland. Over the years, she has contributed her content creation skills to radio stations, marketing agencies, not-for-profits, and a clothing boutique. She currently works as a freelancer, and loves all things cooking, baking, art, and music.

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