Quick answer
The main alternatives to a bank business loan are invoice finance, equipment and asset finance, property-secured loans including second mortgages and caveat loans, unsecured cash-flow loans, lines of credit, trade and purchase order finance, and supplier terms. Pick by what you hold: invoices, assets, property, sales or contracts.
Key points
- Each alternative lends against something different, so start from what you hold.
- Most are secured on an asset or a flow rather than on a long financial history.
- Speed, cost and risk differ widely; compare total dollars, not headlines.
- Routes can be combined, but security has to be coordinated.
- Property-secured
- $20,000 to $5,000,000, first or second mortgage, caveat
- Unsecured cash-flow
- Typically $5,000 to $500,000
- Asset-linked
- Invoices, equipment, orders, stock
- Start with
- The Funding finder tool
Searching for “alternatives to a bank business loan” tends to produce a flat list of product names. That isn’t much use, because the right alternative depends on what you can bring to the table. So this page does it the other way: it’s a map, organised by what you hold.
What are the alternatives to a bank business loan?
| If you hold… | Alternative that lends against it | Read more |
|---|---|---|
| Unpaid invoices to business customers | Invoice finance (factoring, discounting) | Unpaid invoices |
| Equipment or vehicles | Equipment finance, leasing, sale and leaseback | Equipment and vehicles |
| Stock | Stock-backed facilities, supplier terms | Stock and inventory |
| Property with equity | First or second mortgage, caveat loan | Property-secured loans |
| Steady card or online sales | Turnover-based funding | Card and online sales |
| Signed contracts or orders | Order and trade finance | Contracts and orders |
| A trading history | Unsecured cash-flow loans, lines of credit | Trading history |
| Strong suppliers | Trade credit | Supplier terms |
The logic is simple: a bank lends mostly against an application (a track record, financials, a standard security package). Alternatives lend against a thing (an asset or a flow), so they can say yes where the application template says no.
How do the alternatives compare?
| Route | Typical size | Security | Main strength | Main risk |
|---|---|---|---|---|
| Property-secured | $20,000 to $5,000,000 | Property | Large amounts, thin history ok | Property at risk |
| Unsecured cash-flow | Typically $5,000 to $500,000 | Usually none, guarantee likely | Light paperwork, no property | Higher cost per dollar |
| Invoice finance | Moves with invoicing | Invoices | Scales with sales | Fees if customers pay slowly |
| Equipment finance | Matches the asset | The asset | Keeps other security free | Depreciation |
| Line of credit | Set limit | Varies | Flexible, draw as needed | Becomes permanent debt |
| Order and trade finance | Matches the deal | The order | Funds delivery costs | Priced for deal risk |
| Supplier terms | Supplier-set | Often none | Cheapest if free | Small limits |
We don’t publish rates for any of these because pricing depends on your situation. What you can do is compare offers in dollars, as our total cost guide explains.
How do you choose?
Four quick questions:
- What do you hold? Use the table above.
- What is the need? A one-off purchase, a recurring gap, a project or a bridge?
- How much risk can you carry? Property and guarantees put assets and personal wealth at stake.
- When will it be repaid, and from what? If the answer is vague, change the plan, not the product.
The Funding finder runs this logic for you: tick what you hold, add timing and amount, and it ranks routes with plain-English trade-offs.
Can you combine alternatives?
Yes, and many businesses do: supplier terms for everyday buying, invoice finance for working capital, asset finance for machines, and property security for the big one-off. The catch is security. The PPSR describes a “first in, best dressed” principle for priority between registered interests, and a lender holding a general claim over all your assets may block a second lender. Read combining funding routes without clashing before layering.
What about equity, grants and crowdfunding?
business.gov.au lists loans, grants and crowdfunding as ways to fund a business, and covers the debt-versus-equity choice. This site focuses on debt and asset-based routes, because that is what we help arrange. If your idea suits investors, a grant or a crowdfunding campaign, use the official guidance; it is separate to, and can run alongside, what we do.
How do alternatives differ in what they ask of you?
Banks ask for a record, a plan and standard security. Alternatives ask for different things depending on the route. Invoice funders ask about your customers. Equipment funders ask about the asset. Property lenders ask about equity and the exit. Cash-flow funders ask about your statements. Supplier credit asks about your reliability. That variety is the entire reason they exist: each can say yes to a business that the bank’s single template turns away.
It also means preparation differs. A strong pack for one route may need new pieces for another. The funding pack guide lists what to gather for each.
Is it a sign of weakness to use an alternative?
No. Plenty of sound, profitable Australian businesses use non-bank funding because it fits the job better, not because the bank refused. A business with excellent customers may prefer invoice funding because it grows with sales. A business that wants to keep property free may prefer equipment finance. Use of an alternative is a decision about fit. The honest test is not who the lender is, but whether the structure suits your cash flow, your risk and your plan.
When is a bank still the best choice?
If your business has a long record, solid security, no urgency and you can get a competitive offer, a bank is often the cheapest option. Alternatives earn their place when the bank says no, is too slow, wants things you cannot supply, or lends in a shape that does not fit. For help sorting which describes you, see why banks say no.
Ready to find your route?
Tell us what you hold and what you need. The enquiry takes about a minute, involves no credit check, and does not send your details to a pile of lenders. A real person reads your answers and calls you. Accurate answers on assets, amount and timing mean you are matched properly first time. See if you qualify.
Frequently asked questions
What is the cheapest alternative to a bank loan?
It depends on your situation. Supplier terms can cost nothing if used well. Secured routes generally cost less per dollar than unsecured ones. Compare total dollars over the time you will really use each.
Are alternatives safe?
They carry the same kind of risks as any borrowing, and some put assets or personal guarantees on the line. Read the terms, compare costs and take independent advice before signing.
Can I use more than one alternative at once?
Yes, often. Make sure each funder's security claims don't clash. The PPSR shows registered security interests, and our guide on combining routes explains the order of priority.
Do I have to give up equity?
Not with the routes covered here. These are debt-style or asset-based funding. Equity investment and crowdfunding are different paths, which business.gov.au also explains.