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Business finance, explained

Business finance in Australia — every kind, and how to choose

Business finance is money borrowed by a business for a business purpose, in any of seven common structures — from a bank term loan to an invoice advance to a private loan secured by property. The right one depends on three things: whether you own real estate, how fast you need the money, and what your accounts can show. HomeSec offers one kind — secured business finance, $20,000 to $5,000,000, funded in as little as 24 hours — and this page explains all seven so you can tell whether it is yours.

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See if you qualify in sixty seconds. No credit check to apply, no financials, no payments for the first six months. That's the HomeSec Advantage.

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Business finance, business funding, business lending — the same money

The phrases are interchangeable, and knowing that saves a lot of confusion. A bank calls it commercial lending. A broker calls it business funding, or business funding solutions. A borrower calls it a business loan. None of the phrases tells you the two things that actually decide whether a product fits: what it is secured by, and how it is repaid. Every kind of business finance in Australia is an answer to those two questions, and here they are.

The seven kinds of business finance

Kind What it is Right for HomeSec
Bank term loan or overdraftThe cheapest money and the most evidence: financials, serviceability, security, valuation, three to eight weeks.Planned capital with time to arrange it and accounts that tell the right story.No
Unsecured cashflow loanLent against turnover, usually $10k–$150k, repaid by daily or weekly debit over a fixed term. Fast, and priced for the absence of security.A small amount, quickly, with no property to offer.No
Equipment and asset financeA loan or lease secured by the equipment itself — a vehicle, a machine, a fit-out.Buying a specific asset that holds its value.No
Invoice financeAn advance against unpaid invoices, repaid when the customer pays.Long payment terms from large customers, and no property.No — not offered
Trade financeFunding the gap between paying a supplier and being paid by a customer, usually for importers.Import cycles, with a bank relationship.No
Private secured business loanLent against equity in real estate — first or second mortgage, or a caveat — by a lender assessing the property and the exit rather than the accounts. Open term, no serviceability test, funded in as little as 24 hours.Equity in property, a business purpose, and a timetable or a set of accounts a bank cannot work with.Yes — this is what HomeSec does
Commercial property loanA loan to buy or borrow against business premises, secured by the premises.Buying, refinancing or releasing equity from commercial property.Yes — secured by commercial property to 70% LVR
Bridging financeShort-horizon funding between one certain event and another — a sale, a settlement, a refinance.A known exit that has not arrived yet.Yes — business bridging, open term

Descriptions of product categories as they are generally offered in Australia, not of any named lender. Individual products vary.

How to choose — four questions

Most business owners do not need a product education; they need to know which of the seven is theirs. These four questions get there in the order that matters.

  1. 1
    Do you own real estate with equity in it?If yes — a home, an investment property, business premises, land — secured finance is available to you, and it is cheaper and larger than anything unsecured. If no, a cashflow lender or asset finance is the honest answer, and we will say so.
  2. 2
    How fast do you need it?Weeks: a bank, if your accounts support it. Days: a private secured lender. If the answer is "this week", the only question left is which instrument — and a caveat needs nobody's consent.
  3. 3
    Do your financials tell the story you need them to?Two years of accounts describe the last two years. A business that has just won a contract, or is recovering from a year it will not repeat, is badly described by them. Secured finance is assessed on the property and the exit instead.
  4. 4
    How long do you want it for?A fixed term suits a fixed plan. An open term — repay early without penalty, extend without a fee — suits a business whose plan will move, which is most of them.

What HomeSec is, and is not

HomeSec is a private lender, lending its own money since 2004, and it offers one kind of business finance: loans secured by real estate. That covers a great deal — first mortgages, second mortgages, caveats, commercial property and bridging — from $20,000 to $5,000,000, with an open term, no serviceability test and interest capitalised for up to 6 months.

It does not cover unsecured loans, equipment finance, invoice finance or trade finance. If your situation needs one of those, we will tell you on the first call, because a lender that sells you the wrong product is not one you should return to. Every application is read by a Lending Manager and every credit decision is signed off by a person. We do not use artificial intelligence to assess, approve, decline or price a loan.

Business funding solutions, by situation

The product is the answer; the situation is the question. These are the six we fund most, and each links to the page that deals with it in full.

Cashflow gap

The bank said no. The ATO said now.

Tax or creditor pressure, and equity sitting in your home or an investment property that the bank will not let you reach in time.

How we fund it → Opportunity

Stock, plant or a site at a price

A window that closes in days, not in the six weeks a bank needs to reach an answer. The deal is good; the timing is the problem.

How we fund it → Bridge

A settlement or refinance that moved

The exit is already in sight — a sale, a refinance, money that is coming — just not yet. You need to get from here to there.

How we fund it → Start-up

No trading history at all

New entity, new ABN, no financials to show anyone. Equity in property and a clear purpose carry the case.

How we fund it → Credit-impaired

Defaults, arrears, a thin file

A credit score that rules you out everywhere else does not rule you out here. We lend against the property and the exit.

How we fund it → Regional

Outside the metro postcodes

A country town, a rural holding, vacant land — security that a capital-city lender will not look at.

How we fund it →

Business finance for companies, trusts, sole traders and start-ups

Companies, trusts and sole traders — including start-ups. The structure of the borrower changes the paperwork, not the answer: a company borrows against a director's home, a trust borrows against a property the trustee holds, a sole trader borrows in their own name. A start-up with no accounts is assessed the same way an established business is — on the property and the purpose — which is why new businesses and small ones are ordinary files here rather than exceptions.

What it costs, and the honest comparison

Secured private finance costs more than a bank and generally less than an unsecured cashflow loan for the same amount. We publish no rate, because a rate with "from" in front of it describes the best file and not yours; we publish every fee, and the list is short. What it costs and how it compares are both stated plainly.

Questions we get on the phone

What is business finance?
Money borrowed by a business for a business purpose, from any source and in any structure — a bank loan, an overdraft, a cashflow loan, equipment finance, invoice finance, trade finance, a private secured loan. The phrases business finance, business funding, business lending, business capital and business loans are used interchangeably; none of them tells you which structure is being described, which is why the question to ask is always "secured by what, and repaid how".
What is the difference between business finance and a business loan?
None in ordinary use. "Business finance" is the category and "business loan" is the most common thing in it. Banks say "commercial lending", brokers say "business funding", borrowers say "business loan". The differences that matter are in the product — secured or unsecured, fixed or open term, assessed on accounts or on assets — not in the phrase.
What kind of business finance does HomeSec offer?
Private secured business finance: loans of $20,000 to $5,000,000 secured by a mortgage or caveat over Australian real estate, funded from HomeSec's own money, assessed on the property and the exit rather than on financials, with an open term and interest capitalised for up to 6 months. First mortgages, second mortgages, caveats, commercial property loans and business bridging. Not unsecured loans, not equipment finance, not invoice finance.
What are business funding solutions?
A phrase brokers and lenders use for the same set of products — it simply means the kinds of business finance available. The useful version of the question is which one fits your situation, and the six situations we fund most often are set out above, each with a link to the detail.
Which business finance is fastest?
Unsecured cashflow loans approve quickly for small amounts. For anything larger, a private secured loan is faster than every alternative because it removes the two slowest steps — a valuation and the analysis of financials — and a caveat is the fastest instrument within it because it needs nobody's consent. A bank is the slowest, at three to eight weeks, for reasons that have nothing to do with how hard anyone works.
Which business finance is cheapest?
A bank, if you can get it and can wait for it. Secured private lending sits above bank pricing and generally well below unsecured cashflow lending for the same amount. Equipment finance is priced against the asset. We do not publish a rate, because a rate with "from" in front of it is the number the best file gets.
Can a new business get business finance?
From a bank, rarely — most want two years of trading. From a cashflow lender, usually not — most want six to twelve months of turnover. From HomeSec, yes: companies, trusts and sole traders — including start-ups. What carries a start-up's case is equity in property and a clear purpose, not a trading history it does not have.
Can I get business finance with bad credit?
From a bank or a cashflow lender, a poor credit score is usually disqualifying or repriced. Here, considered, and never disqualifying on its own — defaults, arrears and thin files do not rule you out. We lend against property equity and a credible exit, and a person reads every file.
Is business finance regulated in Australia?
Lenders are subject to the ASIC Act, the Corporations Act and the Australian Consumer Law. Credit to consumers additionally requires an Australian Credit Licence under the NCCP Act; credit wholly for business purposes sits outside that Act, which is why business lenders ask you to declare the purpose. HomeSec lends for business and investment purposes only.
How do I apply for business finance with HomeSec?
A phone call, or a sixty-second form. Tell a Lending Manager the property, the amount, the purpose and how the loan gets repaid, and you will usually have an indicative answer on the call. Conditional approval takes about fifteen minutes of documents — photo ID, a rates notice and a mortgage statement — and funding is as little as 24 hours from a clean, complete scenario.
Talk to a Lending Manager

Tell us the situation in your own words. We will tell you which kind of business finance it is, whether it is ours, and if it is not, whose it is. 1300 93 83 87, Mon–Fri, 8:30am – 5:30pm Melbourne time.

Secured business finance, by instrument

Private lending since 2004. One kind of business finance, in the shapes it takes.

Lending against propertySmall business loansFast private mortgagesSecond mortgagesFirst mortgagesNo doc business loansCommercial loansFast business loansStart-up business loansCaveat loansOpen term, no minimumEquity releaseWorking capitalSecured against your homeBuying a businessRefinancing a facility
Sixty seconds, no documents

See if you qualify in sixty seconds

Three short questions, no credit check to apply and no financial statements. A Lending Manager reads it and calls you back with a real answer — not a call centre, not an algorithm.

That's the HomeSec Advantage.

See if you qualifyCall 1300 93 83 87Mon–Fri, 8:30am – 5:30pm Melbourne time

Reviewed by Paul Stone, Joint Chief Executive

1300 93 83 87 homesec.com.au
Get funded Call 1300 93 83 87