What Are Unsecured Business Loans?

Unsecured business loans such as cashflow loans don't use residential or commercial property as security. However, trade finance and unsecured business finance are for business purposes only. Although invoice finance may require real estate for loan security; nevertheless, we have lenders who don't need real estate for security.

There is a wide range of trade finance and business lending facilities available for varied business purposes. As such, business funding can solve specific cash flow or working capital business problems.  

What are the Unsecured Business Loan Types?

Loan TypeCash Flow LoansSupplier LoansInvoice Finance
PurposeThey are used to fund business working capital, marketing, tax debt, or other debts.Pay suppliers such as large single expenses. As a result, spreading the payment over a longer-term.Improve cash flow by reducing payment terms from 30, 60, or 90 days to one week from invoice.
Loan Termup to 3 years6 monthsThe loan is repaid when your customer pays your invoice.
Security RequiredPPSRPPSRPPSR
Bad CreditMinorMinorYes
Low Doc

<100k - Bank statements

>100k - P/L and Financials.

<100k - Bank statements

>100k - P/L and Financials.

  1. Initially, cash flow loans and unsecured small business loans. Generally, unsecured cash flow loans have a set amount you repay over the loan term. An example would be a borrowed amount of $100,000 with a repayment of $110,000 over the loan term.
  2. Secondly, Unsecured loans can be a business line of credit or a business overdraft.
  3. Also, invoice factoring finance. Basically where you obtain finance for your unpaid invoices to improve cash flow.
  4. Finally, supplier finance facilities where you might have large single supplier expenses you need to pay.

Invoice factoring and supplier loans can work together exceptionally well. Consequently, effective use of these facilities can give fantastic improvements in cash flow. For example, when your invoice terms are 90 days or longer; plus your suppliers require immediate or short payment terms.


Unsecured Business Loans case study


ABC carpentry offers a range of construction services, though, the main product they offer is kitchens. Also, ABC carpentry's primary customer base is through volume home builders who pay their invoices on 60-day terms.

Problem 1 - By the time they receive payment for work completed, it was around 75 days.

Problem 2 - ABC's leading supplier of raw wood materials requires their payments on seven-day terms. Plus, a minimum order amount to achieve maximum discounts.

In summary, ABC carpentry needed to pay the lump sum supplier bill while waiting on the funds for 75 days. As a result, cash flow issues crippled business growth and damaged the working capital.

Loan Saver Network Unsecured Business Solution:

Loan Saver Network understood the issues ABC were facing and believed we had a suitable finance option. As a result, we helped with a loan application with a set of terms and conditions suitable for their business.

As a result, we put in place a supplier finance facility to break up the invoices over 6 monthly instalments.
Secondly, we established invoice factoring to finance the invoices and bring forward the revenue.
Consequently improving the business cashflow and giving the business an ability to grow.

Unsecured Business Finance - What are the benefits and purpose?

Specialised unsecured small business loans work by fixing cash flow problems. Also, help when traditional lenders can't assist with funding.

  1. Firstly, cashflow business loans are excellent when there is good cash flow, and a short term loan is required.
  2. Plus, invoice factoring is excellent when you have extended payment terms that restrict cashflow,
  3. Also, supplier financing is great when suppliers need to be paid on short terms, especially when you have long invoice terms.
  4. Keep in mind, a combination of supplier finance, and invoice finance work together to balance cash flow.
  5. Also, unsecured finance can suit business owners who don't want to use property security.
  6. However, Unsecured business finance is more flexible than business credit cards. As a result, unsecured business facilities can grow with your business needs. Plus in the case of invoice factoring the interest is paid as a cost of sale.
  7. Finally, Unsecured finance can be a great option if you have a complicated business structure. Although unsecured loans can attract a higher interest rate there are still great benefits.

Essentially an unsecured business loan brings forward surplus cash flow from a business. It can be used to power growth in business to buy equipment or pay for new staff costs, for example.

Unsecured Finance - what else should i know?

Important considerations of unsecured finance

Unsecured finance has many purposes. As such, each facility solving a different problem. However, the main benefit is obtaining funding without the need for real estate security. Hence, this would be useful where there are multiple directors with property investment interests.

Secured finance facility would need to use one or multiple directors properties as security. Consequently, securing a loan with property could cause issues with refinancing; or a directors personal investment interests.

There are other features of unsecured facilities are:

  • No available equity.
  • Also, you can allocate the use of security for other purposes.

Free Unsecured Loan Assessment

A free unsecured business loan assessment will assist you in finding the best business lenders available for you. Unsecured loans can suit a variety of purposes, such as:

  • Initially, providing working capital to improve cashflow.
  • Also, paying upcoming or outstanding tax debt.
  • Finally, financing receivables or paying invoices for critical suppliers.

We help our clients apply for the right unsecured business finance to help manage cash flow and cover short term debts. Call Loan Saver Network today for a free unsecured business loan assessment on 1300 796 850.

Let's talk about an unsecured business loan solution that suits you

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FAQs for unsecured Business Loans

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Unsecured Business Loans FAQs

Unsecured small business loans are quite fast. As such, you usually have access to funds within three days to one week. However, it all depends on the complexity of your business and finance. Also, access to funds can be the next business day after approval, and within 24 hours.

Unsecured small business loans have a simpler application process and are much faster than bank lenders.

Unsecured facilities can be in the company name. As such, there is a need to tie up personal security in company borrowing.

Importantly, a loan facility in the directors’ names would require adjustments to personal and business financials.

  • Accounting for a loan from you personally (director) to the company.
  • PPSR from you personally to the company to protect your loan to the company. As such, a PPSR would protect you in the event of a company wind up.

These are additional work; however, help protect personal assets. Although secured facilities have other benefits; such as lower repayments and longer loan terms. However, unsecured facilities have different risks and benefits.

Finalise supplier invoices with supplier finance. Hence, spread your supplier terms from their immediate payment to 6 months. As such this can help improve your business cash flow. Additionally, you may obtain extra working capital funds for cashflow purposes.

Supplier Finance is mostly used for business expansion, putting on new staff or minor fit-outs. Also, are excellent facilities for new start-up businesses where there is little evidence of cashflow.

  • Firstly, ongoing facility to suit business need.
  • Secondly, no property security required. PPSR Business security required
  • Thirdly, the loan facility in business or company name
  • Also, loan amounts provided to 80% of your invoice (lender conditions apply). Then once the invoice is paid the remaining 20% is provided minus fees/interest costs.
  • Then, some lenders will allow factoring of invoices on an ad hoc basis; without the need for financing all invoices.
  • Finally, settlement for invoice fiance can be achieved in 2 – 7 days, depending on the lender

Invoice financing facilities provide finance against your unpaid invoices. Therefore, where invoices have 90-day terms, they can severely affect your business cash flow. Plus, we find business cashflow suffers further when there is a change in invoice terms from 30-day to 90-day terms. Therefore, the business struggles to fund a further 60 days before receiving revenue.

You could obtain finance against invoices and receive up to 80% of the outstanding invoice. Then the remaining 20% is received once your customer pays the invoice (minus the interest and costs). Also, the financing costs are related to individual invoices. Therefore, they are a cost of sale and not an ongoing overhead.

  • Firstly, 1-36 month loan terms, however, most loan terms are 12 months.
  • Secondly, income assessed by the lender accessing online accounting software or bank statements.
  • Thirdly, income assessed by profit and loss, financials, or bank statements.
  • Also, no property security required, however, PPSR security required.
  • Importantly, the loan facility can be in a company name.
  • Plus, lines of credit are also available where you pay interest only on the money you use.
  • Keep in mind, cash flow loan amounts available from 80%-200% of monthly cash flow.
  • Bad Credit is not usually acceptable. However, credit issues can be reviewed and approved as an exception.
  • Finally, there is no mortgage security; consequently, unsecured finance can settle in as little as two days.

These unsecured business loans use the cash flow of a business to substantiate its ability to repay the loan. Although cashflow loans were originally designed to be used for businesses with high daily transactions through EFTPOS facilities. Recently, there have been changes to the products that give availability to a wide range of businesses.

  • The interest rates are risk-based and use credit scoring as an assessment.
  • Though, the repayment schedule is structured to suit your business cashflow.
  • Also, loan terms could be anywhere from 1 month to 36 months; however, the preferred term is 12 months.

Each of the unsecured finance facilities has a different purpose, and with intentions to grow your business.

They are used to solve either working capital, cash flow or supplier payment terms. Also, each facility differs in the method of repayment. Indeed, the types of unsecured business facilities are:

  • Initially, business cash flow loans available with terms of up to 3 years.
  • Secondly, invoice facilities where you can receive immediate payment for invoices to improve cash flow.
  • Finally, supplier financing where you can pay a large supplier invoice.

Requiring Finance?

Contact Loan Saver Networks team to assist in developing a strategic approach to your business cashflow requirements. Additionally, there are also fast secured caveat loans or second mortgages available where unsecured loans may be a suitable option. 

If you require a business loan from $5,000 to $500,000 with no upfront fees* then apply now! We'll have one of our loan consultants call you as soon as possible.