Secured vs unsecured business loans
By Shaun Johnson · Updated 24 October 2026
How secured and unsecured business loans differ on how much you can borrow, what they cost, how fast they are and what's at risk.
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- Amounts, cost and speed compared
- Personal guarantees explained
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In a nutshell
An unsecured business loan doesn't need property or a specific asset as security, although directors usually give a personal guarantee. It's faster and needs less paperwork, but it costs more and amounts are usually lower, often up to a few hundred thousand dollars. A secured loan is backed by property or business assets, so you can usually borrow more, over a longer term, at a lower cost, but it takes longer and the security is at risk if you can't repay.
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AFCA memberNon-bank and private lending specialists · 100+ lendersAt a glance
- Unsecured amounts
- Often up to a few hundred thousand dollars
- Secured amounts
- Up to millions, depending on the security
- Speed
- Unsecured is usually faster
- Cost
- Secured usually costs less
- Personal guarantee
- Usually needed for both
- Paperwork
- Less for unsecured
How unsecured business loans work
An unsecured business loan doesn't need property or a specific asset as security. Non-bank lenders assess it mainly on your business bank statements, revenue and trading history, which is why decisions can be fast and paperwork light.
"Unsecured" doesn't mean no one is responsible if the loan isn't repaid. Most lenders ask the directors for a personal guarantee, which makes them personally liable for the debt. Some also register a general security interest over the business's assets on the Personal Property Securities Register, especially for larger loans.
How secured business loans work
A secured loan is backed by an asset the lender can claim if the loan isn't repaid. That could be:
- property, residential or commercial, through a first or second mortgage
- the vehicle or equipment you're buying, through equipment or vehicle finance
- your invoices, through invoice finance
- other business assets, such as stock
Because the lender has security, it can usually lend more, over a longer term, at a lower cost. The trade-off is time and paperwork: property-secured loans need a valuation and legal documents, and the security is at risk if you can't repay.
Which one suits your business?
An unsecured loan usually suits you if:
- you need funds quickly, for stock, wages, a marketing push or an ATO debt
- you need a smaller amount, often up to a few hundred thousand dollars
- you don't own property, or don't want to put it on the line
A secured loan usually suits you if:
- you need a larger amount or a longer term
- keeping the cost down matters more than speed
- you're buying an asset that can secure the loan itself, such as equipment, vehicles or property
Many businesses use both: equipment finance secured by the equipment, and an unsecured line of credit for cash flow.
What it costs
Unsecured loans usually cost more, because the lender takes on more risk. Secured loans usually cost less but can carry valuation and legal fees. Rates vary widely by lender and business, so we don't quote them here. Compare offers on the total amount you'll repay, including all fees.
Non-bank, private and bank lenders
Non-bank lenders are the main source of unsecured business loans and assess you mainly on cash flow. Banks offer smaller unsecured loans online, but mostly lend against property for larger amounts. Private lenders lend mainly against property and can move quickly when speed matters more than cost. See our guides to bank vs non-bank business loans and private business lenders.
Published unsecured limits from a sample of lenders
Here's a selection of what lenders publish about their unsecured business lending. It isn't a full list of lenders or a ranking.
- Lumi lends up to $1 million, with most facilities up to $300,000 unsecured. Larger amounts may need property backing. Profile →
- Prospa needs no upfront security for funding up to $150,000. Above that, it takes a charge over business assets, and its larger loans are backed by property. Profile →
- Tractor Ventures lends unsecured and with no director's guarantee under $300,000, for businesses with $50,000 or more in predictable monthly revenue. Profile →
- Westpac's Unsecured Business Loan goes up to $250,000 over 1 to 5 years, with no asset security, although guarantees may be needed. Profile →
- NAB's QuickBiz Loan offers up to $250,000 unsecured over 1 to 5 years, for businesses trading 12 months or more with $75,000 or more in annual turnover. Profile →
A sample of lenders, as published by each lender, checked 24 October 2026.
Unsecured vs secured at a glance
Security
- Unsecured business loan
- No property or specific asset, though some lenders register a general security interest over business assets
- Secured business loan
- Property, vehicles, equipment or other business assets
Personal guarantee
- Unsecured business loan
- Usually required from the directors
- Secured business loan
- Often required as well
How much
- Unsecured business loan
- Often up to a few hundred thousand dollars
- Secured business loan
- Up to millions, depending on the security and the lender
Term
- Unsecured business loan
- Usually 3 months to 5 years
- Secured business loan
- Up to 25 to 30 years for property-secured bank loans
Speed
- Unsecured business loan
- Depending on the lender, decisions can be as quick as a few hours
- Secured business loan
- Days to weeks, allowing for valuations and legal work
Cost
- Unsecured business loan
- Usually higher
- Secured business loan
- Usually lower
Paperwork
- Unsecured business loan
- Often just bank statements
- Secured business loan
- Financials, plus valuations and security documents
Usually suits
- Unsecured business loan
- Fast needs, smaller amounts, and businesses without property
- Secured business loan
- Larger amounts, long-term needs and lower cost
| Unsecured business loan | Secured business loan | |
|---|---|---|
| Security | No property or specific asset, though some lenders register a general security interest over business assets | Property, vehicles, equipment or other business assets |
| Personal guarantee | Usually required from the directors | Often required as well |
| How much | Often up to a few hundred thousand dollars | Up to millions, depending on the security and the lender |
| Term | Usually 3 months to 5 years | Up to 25 to 30 years for property-secured bank loans |
| Speed | Depending on the lender, decisions can be as quick as a few hours | Days to weeks, allowing for valuations and legal work |
| Cost | Usually higher | Usually lower |
| Paperwork | Often just bank statements | Financials, plus valuations and security documents |
| Usually suits | Fast needs, smaller amounts, and businesses without property | Larger amounts, long-term needs and lower cost |
Related guides
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FAQs
Questions about secured vs unsecured business loans
An unsecured business loan doesn't need property or a specific asset as security. The lender relies mainly on your business's cash flow and trading history, and the directors usually give a personal guarantee.
Not entirely. Most unsecured lenders ask the directors for a personal guarantee, which makes them personally liable if the business can't repay. Some also register a general security interest over the business's assets, especially for larger loans.
Often up to a few hundred thousand dollars, depending on your revenue, trading history and credit. Lumi, for example, lends most facilities up to $300,000 unsecured, and Prospa needs no upfront security up to $150,000.
Because the lender has no specific asset to recover if the loan isn't repaid, so it takes on more risk and prices for it. In return, you get a faster decision, less paperwork and no property on the line.
Residential or commercial property, vehicles and equipment, invoices and stock are all common. Most private lenders in Australia require property.
Yes. Equipment and vehicle finance are secured by the asset you're buying, and invoice finance is secured by your invoices. Larger general-purpose loans without property are usually unsecured.
No. There's no cost to you for our service. We're paid by the lender when your loan settles, and there's no obligation to proceed.
This page is general information only and isn't credit, tax or financial advice. Lender details are taken from each lender's published information, checked 24 October 2026, and can change. All lending is subject to each lender's credit criteria and assessment.