Business loan options for small business owners in Victoria
Quick answer: Official sources group business finance into debt (borrowing) and equity (selling part of the business). Within debt, the common options are secured and unsecured loans, lines of credit and overdrafts, asset finance (hire purchase, leasing, chattel mortgages), invoice finance and trade finance. Which one suits you depends on what the money is for and what you can offer as security. We didn't find a government-backed loan guarantee scheme that is open now, so check current eligibility on the official pages below.
Key takeaways
business.gov.au describes debt and equity as the two main types of funding. This article covers the debt side.
A loan can be secured (backed by collateral) or unsecured (the lender looks mainly at the financial health of the business).
Match the product to the purpose. business.gov.au says an overdraft shouldn't be relied on for capital purchases or long-term financing.
Treasury's COVID-era loan guarantee schemes are closed. We found no current guarantee scheme, so check current eligibility before assuming one exists.
Ask any lender or broker for the total cost, the security required and the fees, in writing.
What types of business finance are there?
business.gov.au says the two main types of funding are debt and equity. Debt means borrowing money; equity means giving up part ownership, for example by selling shares to investors. Most of the products below are debt.
| Option | How the official sources describe it | |---|---| | Secured loan | Backed by collateral or security. | | Unsecured loan | Usually looks at the financial health of your business instead of specific assets. | | Line of credit | A revolving loan that lets you borrow up to a set limit. | | Overdraft | Tied to your business bank account. Not suited to capital purchases or long-term financing. | | Hire purchase | You pay off an asset in instalments and own it once all repayments are made. | | Leasing and chattel mortgage | Listed as options for equipment and vehicles. | | Invoice finance | You borrow against unpaid invoices. Factoring goes further: you sell unpaid invoices at a discount. | | Trade finance | Helps cover the gap between paying suppliers and getting paid. Most useful for importers and exporters. |
What is the difference between a secured and an unsecured loan?
A secured loan is backed by collateral, such as an asset the lender can claim if repayments aren't met. An unsecured loan usually relies on the financial health of your business instead of specific assets. business.gov.au notes that debt finance often requires collateral. Which one is available to you depends on the lender and your circumstances.
What are a line of credit and an overdraft?
Both let you draw funds as needed. business.gov.au describes a line of credit as a revolving loan you can borrow against up to a set limit, and an overdraft as tied to your business bank account. It cautions that you shouldn't rely on an overdraft for capital purchases or long-term financing, so they are generally seen as short-term cash flow tools.
What are the options for buying equipment or vehicles?
business.gov.au lists hire purchase, leasing and chattel mortgages as asset-based options for equipment and vehicles. With hire purchase you own the asset outright once you've made all repayments. We didn't find official guidance comparing the tax or accounting treatment of each, so speak to your accountant before choosing.
What is invoice finance?
Invoice finance lets a business borrow against its unpaid invoices. Factoring is a step further: you sell your unpaid invoices to another business at a discount. Both are aimed at smoothing cash flow when customers pay late. Ask about fees and who collects payment from your customers.
Are there non-bank lenders and other options?
business.gov.au says non-bank lenders often have more flexible loan criteria than traditional banks. It also warns that a merchant cash advance is easy to obtain but far more expensive because of high interest rates. Compare the total cost, not just how quickly you can get the funds. We didn't find official guidance on "low-doc" business loans, so we can't describe them here.
Are there government-backed loans or support in Victoria?
The Australian Government's COVID-era loan guarantee schemes are closed. Treasury's pages show the SME Guarantee Scheme phases closed on 30 September 2020 (Phase 1) and 30 June 2021 (Phase 2), and the SME Recovery Loan Scheme is also listed as closed. See Treasury: SME Recovery Loan Scheme. We didn't find official guidance on a guarantee scheme that is open today.
For Victoria, Business Victoria publishes pages on applying for a business loan and refinancing a business loan, and lists grants and loans for specific groups. Programs open and close, so check current eligibility on the official page before you plan around one. As at 4 November 2026, we did not confirm any specific current Victorian small business loan program.
Do consumer credit protections apply to business loans?
Often not in the same way. ASIC's guidance says a loan to a company for any purpose is not subject to the responsible lending obligations, and that a loan to an individual for a predominantly business purpose (more than half) is not either. See ASIC: Does the credit legislation apply?. Treasury has also published material on extending a small business responsible lending exemption (Treasury consultation). We couldn't confirm the exemption's current legal status as at today's date, so we don't rely on it here. ASIC also has a page on disputes about commercial loans. In practice, read the contract carefully and ask questions before you sign.
How Marl Finance can help
Marl Finance Pty Ltd, trading as Marl, is a credit representative of Australian Finance Group Ltd (AFG), ACL 389087. We provide credit assistance, which means we can help you understand and compare business finance options and prepare your application, in English and Chinese. We can't tell you which product is right without knowing your circumstances. Our Credit Guide is available at marl.com.au/credit-guide.
To speak to Marl, email info@marl.com.au or call 03 8849 0131 (9:30am to 5:30pm, Monday to Friday).
Frequently asked questions
Do I need security to get a business loan? Not always. A secured loan is backed by collateral. An unsecured loan usually looks at the financial health of your business instead. business.gov.au notes debt finance often requires collateral. It depends on the lender.
Is an overdraft a good way to buy equipment? business.gov.au says you shouldn't rely on an overdraft for capital purchases or long-term financing. It lists hire purchase, leasing and chattel mortgages as asset-based options for equipment and vehicles.
Is there a government loan guarantee for small business right now? We didn't find one. The COVID-era schemes are closed according to Treasury. Check business.gov.au and Business Victoria for current options.
What is invoice finance? Borrowing against unpaid invoices. Factoring means selling unpaid invoices at a discount.
Are non-bank lenders an option? business.gov.au says they often have more flexible criteria than banks. Compare total cost and fees carefully.
Where can I make a complaint about a commercial loan? ASIC has a page on disputes about commercial loans, linked above. We didn't find further detail we could confirm.
Sources
This article is general information only. It is general in nature and does not take into account your objectives, financial situation or needs. Marl Finance Pty Ltd ABN 18 616 948 540 (trading as Marl), credit representative 000496273 of Australian Finance Group Ltd ACL 389087. We provide credit assistance; see our Credit Guide at https://www.marl.com.au/credit-guide. Last updated 4 November 2026.
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