Key Takeaways
- Commercial finance covers a wide mix of funding options for Australian businesses, from property loans to working capital tools. Choosing the right one depends on purpose, timelines, and whether you can offer security.
- You do not always need property to secure a loan. Lenders can look at your financial position and credit score when assessing your application.
- Rates and terms vary by product and lender. Secured loans usually cost less than unsecured loans because the lender has security to reduce risk.
- Quick access is possible through private lenders and non bank lenders. These options suit urgent needs or non standard situations.
- Cash flow tools like overdrafts, lines of credit, invoice finance, and trade finance can smooth day to day operations without locking you into a large lump sum loan.
- Large projects such as construction and development usually require staged funding with drawdowns tied to milestones. Planning the exit or refinance early is essential.
- Approval improves when your numbers are tidy. Expect lenders to review bank statements, profit and loss statements, balance sheets, ATO portals, and details about any security.
- Working with a specialist saves time. A broker who understands lender policy can match your situation to the right shortlist and keep your application moving.
Commercial finance is funding designed specifically for business use. The right structure can steady cash flow, unlock new locations, and help you buy assets without draining reserves. This guide walks through the main options available in Australia, how they work, and what to watch before you sign.
What Commercial Finance Can Do For Your Business
Businesses use commercial finance to purchase property, fund fitouts, expand teams, increase stock, replace or upgrade equipment, manage seasonal gaps, and pay tax obligations. Lenders consider the purpose, the strength of the business, and the security on offer. If property security is not available, you still have options through unsecured lending, invoice finance, equipment finance, and asset based solutions.
Common goals include:
- Buy or refinance a warehouse, office, clinic, or retail site.
- Upgrade a store or office with fitout finance.
- Acquire plant and machinery without paying the full cost upfront through equipment finance.
- Smooth cash flow with an overdraft, a line of credit, invoice finance, or trade finance.
- Fund construction and development with staged facilities.
- Consolidate expensive debts into one structured loan to improve cash flow
- Access short term capital through private lending for time sensitive needs.
- Pay off existing obligations to the ATO and avoid tax debt.
The Main Types Of Commercial Finance In Australia
Secured Business Loans
A secured business loan uses property, vehicles, or other assets as security. Because the lender has security, pricing and maximum loan size can be more favourable compared with unsecured options. Secured loans suit bigger amounts, longer terms, and projects that need stable repayments.
Unsecured Business Loans
An unsecured business loan does not require property or other assets as security. Lenders assess bank statements, trading history, credit profile, and the health of the business. Unsecured loans often fund working capital, supplier payments, or growth activity.
Asset Based Finance
Asset based finance uses business assets to secure a facility. Lenders consider the value and liquidity of items such as receivables, inventory, vehicles, machinery, or real estate. Funding can be structured as a term loan or a line of credit. This suits businesses with strong assets but uneven cash flow.
Commercial Property Loans
Commercial property loans help you buy or refinance property used for business or investment. Property types include offices, warehouses, medical and allied health suites, retail premises, and industrial sites. Terms can be structured over many years and can sometimes mirror the style of a home loan, though pricing and policy are different.
Equipment Finance
Equipment finance lets you acquire the tools you need without a large upfront payment. Structures include chattel mortgage, finance lease, hire purchase, operating lease, equipment lines of credit, and rent to own. You can fund new or used assets. Lenders often allow low doc or no doc pathways for smaller amounts, while larger facilities require full financials.
Fitout Finance
Fitout finance funds interior upgrades to a commercial space. That might include lighting, partitions, flooring, plumbing, electrical, signage, security systems, and furniture. This is common for retail, hospitality, medical, and office refurbishments. Instead of paying the entire amount at once, you spread the cost across the term.
Invoice Finance and Selective Invoice Finance
Invoice finance unlocks cash tied up in unpaid invoices. Rather than waiting for customers on longer terms, you can receive an advance, often up to 85 percent of the invoice value, soon after issue. The balance arrives when your customer pays, less the provider fee. Classic invoice finance funds most of the ledger. Selective invoice finance lets you choose individual invoices for funding, which suits businesses with occasional gaps.
Trade and Import Finance
Trade and import finance is a revolving line that pays local or overseas suppliers. You can place orders in volume, accept early payment discounts, and then repay the facility within an agreed window, often 60 to 210 days. This helps importers, wholesalers, and manufacturers align supplier timelines with customer receipts. Some businesses also use trade facilities to bring equipment into Australia before switching to equipment finance once the asset clears customs.
Development Finance
Development finance funds construction and redevelopment. Facilities are drawn in stages that match the build, such as slab, frame, lock up, and final. Interest is often capitalised during construction. Lenders assess feasibility, experience, equity, pre sales where relevant, and the exit plan. Residual stock finance can support completed but unsold units.
Business Overdrafts and Lines of Credit
A business overdraft links a revolving limit to your transaction account, letting the balance dip below zero to an agreed amount. You pay interest only on the drawn portion. A business line of credit works similarly but may sit in a separate account. Both tools suit short term working capital needs, seasonal dips, and timing mismatches.
Second Mortgages
A second mortgage uses the equity in an existing property while leaving the first mortgage in place. This can support business purposes such as working capital, equipment purchase, or refinancing of debts. Rates tend to be higher than a first mortgage because the second lender is repaid after the first in a default scenario. Terms are usually short and are offered widely by private lenders.
Supply Chain Finance
Supply chain finance improves cash flow for both buyers and suppliers. A finance platform can advance funds to the supplier after invoice approval, while the buyer repays the provider over set instalments. This keeps goods moving without squeezing either side of the relationship.
Tax Debt Loans
Tax debt loans provide businesses with a way to clear outstanding ATO obligations while maintaining cash flow. Rather than negotiating payment plans with short terms and high upfront payments, you can use a tax debt loan to settle the balance immediately and repay over time.
Progress Claim Finance for Construction
Construction firms can finance certified progress claims to stop cash from being tied up for weeks. The provider advances a portion of the approved claim. Repayment occurs when the client pays the invoice. This can be a practical way to cover wages and materials across long projects.
Private Lending
Private lenders approve faster and use flexible criteria. Common products include first mortgages, second mortgages, caveat loans, and private business loans. These are useful when timeframes are tight, when a low doc or no doc pathway is needed, or when bank policy does not fit the situation. As with any loan, the exit strategy matters.
Rates, Fees, and Terms
Pricing in commercial finance depends on product type, security, and lender policy. Secured facilities usually have lower rates because the lender can rely on the security value. Unsecured options cost more but move quickly. Trade and invoice facilities charge fees that reflect utilisation and risk. Development funding prices in construction risk and the strength of the feasibility.
Key items to review in any offer:
- Interest rate and how it is calculated
- Comparison rate where available for like products
- Establishment fees and legal fees
- Line fees for revolving limits
- Valuation and settlement costs for property backed loans
- Early repayment rights and any break costs
- Security to be taken and any guarantees
Eligibility And Documents
Lenders usually consider the following:
- Time in business and trading history
- Business bank statements and average balance trends
- Financials such as profit and loss and balance sheet
- ATO portals and any existing payment plans
- Credit profile of the business and directors
- Asset register and commitment schedule for existing debts
For larger loans, expect more detailed reviews. For smaller equipment and unsecured amounts, some lenders can rely on a read only view of bank statements with fast decisions. Where property is used as security, a valuation is standard.
Risk Management And Sensible Borrowing
Debt should support a clear plan. A few habits lower your risk and keep flexibility intact.
- Borrow for productive use. Match the loan term to the life of the asset or the timing of the cash inflow.
- Keep buffers for rate changes and delays. Stress test repayments against a higher rate and a slower sales cycle.
- Avoid stacking short term facilities without a plan. Refinancing expensive short term debt into an appropriate longer term loan can improve cash flow.
- Track covenants and review dates. Missing a review or covenant can trigger default clauses.
Keep financials and compliance up to date. Lenders respond faster when your numbers are current.
How To Apply For Commercial Finance
Step 1: Apply Through Our Website
Complete our online form to get started. We will call you to set up a time to learn about your business and your borrowing needs. We can connect you with lenders who can provide lending based on your needs and situation.
Step 2: Application Submission
Once you agree on a product and lender, we will submit your application and work toward approval within your required timeline. Some lenders can approve commercial funding within very short timeframes depending on product and size.
Step 3: Receive Funding
If your facility is approved, review the terms, pricing, and conditions. When you are satisfied, sign the loan agreement and finalise the facility. The lender will then release funds, open your line of credit, or schedule staged drawdowns depending on how the loan works.
Practical Scenarios
Expanding Into Larger Premises
A growing wholesaler needs a bigger warehouse to lift capacity. A commercial property loan funds the purchase with repayments matched to rental income and trading margins. Fitout finance covers racking, lighting, and signage. An overdraft smooths seasonal stock swings.
Replacing A Tired Fleet
A transport operator wants to replace older vehicles that are costly to maintain. An equipment finance line allows staged purchases across the year. Each asset is funded against its serial number. The business keeps capital free for wages and fuel, with repayments aligned to usage.
Bridging Long Payment Cycles
A contractor invoices on thirty day terms but clients often pay late. Selective invoice finance covers only the larger invoices during peak months. Funds arrive within days, and the balance arrives after the client pays. The business keeps control of what it funds and when.
Paying Overseas Suppliers Without Strain
An importer receives a discount for paying suppliers at order. Trade and import finance pays the supplier while the goods are in transit. The facility is cleared after local sales begin. This removes pressure on cash reserves while keeping volume discounts in place.
Short Term Capital To Secure An Opportunity
A property buyer needs to settle quickly on a site with strong potential. A private first mortgage provides the funds within days. The exit is a refinance into a mainstream facility once approvals are in place. The strategy trades higher short term cost for speed and certainty.
Frequently Asked Questions
Do I need property to qualify for commercial finance?
Not always. Many facilities rely on business performance or other assets such as invoices, equipment, or vehicles. Property security can open larger amounts and sharper rates, but it is not the only path.
How much can I borrow?
Amounts range from smaller unsecured loans to multi million facilities backed by property or other security. The cap depends on your purpose, risk, equity, and the lender policy.
What interest rate should I expect?
Rates vary sharply by product. Secured loans usually price lower. Unsecured, private lending, and short term products price higher due to risk and speed. A tailored quote is the reliable way to compare.
How fast can I be approved?
Simple unsecured and overdraft facilities can be fast. Property backed loans take longer due to valuation and legal steps.
Can I apply if I have a credit issue?
Yes, there are lenders that consider recent challenges and low doc pathways. Pricing and terms will reflect the risk. A clear plan and full disclosure help.
Working With Dark Horse Financial
We help you define the right product, prepare a clean application, and negotiate terms that align with your goals. Our lender panel includes banks, non bank lenders, specialist lenders, and private lenders. That range means we can move quickly for urgent needs or structure longer term solutions when you want stability. You get a single point of contact who understands your numbers and your industry.
Conclusion
Commercial finance gives you the freedom to act when opportunities arise and the support to keep trading through shifting conditions. With the right product and a clear plan, funding becomes a tool that strengthens the business rather than a burden. Align the loan to the goal, keep buffers in place, and work with specialists who know how lenders think.
Disclaimer: Loans and their accompanying benefits are available only to those who qualify for them and have been approved. Though we put a lot of care into writing this article, the information presented within is general and doesn’t consider your unique situation. It is not meant to serve as a substitute for professional advice, and you should not rely on it solely for any major financial decisions. You should always consult with a professional when you’re dealing with finance, tax, and accounting matters.
Speak With A Commercial Finance Expert
Ready to explore your options or sharpen an existing facility? You can talk to a Dark Horse Financial specialist about your plans and timeframes. Enquire today and get tailored options that fit your business.
