Business Loan Interest Rates

Get a competitive offer on business finance from Prospa

Prospa offers finance options that provide small businesses with access to working capital quickly, when they need it to grow or expand, or to support cash flow.

Ask us about interest rates on our line of credit and business loan products with repayments that work in with your cash flow so you can remain in greater control of your finances. The application process takes just 10 minutes with a fast decision and funding possible in 24 hours. So if you need to borrow up to $300K, get in touch with Australia’s #1 online lender to small business.

Fixed rate finance options up to $300,000

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Choice

Borrow up to $300K with 10 minute application, fast decision and funding possible in 24 hours

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Support

Talk to real people. Business Lending Specialists who are focused on getting you what you need, sooner.

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Confidence

More than 28,500 small businesses have borrowed over $1.6 billion from Prospa so far. Join them.

Or call us at 1300 882 867. Our team is available to support you.

“We chose Prospa over a traditional bank because they understand what it’s like to be a small business. They understand that we are individuals competing in a very competitive world."

Brian Holding
Beach Almond Restaurant, QLD

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What do you have in mind?

If you have business objectives, but are not sure if you can achieve them with your current financial situation, perhaps Prospa can help you get there sooner with a Small Business Loan or Line of Credit.

More than 28,500 Australian small businesses have turned to Prospa for support to help them grow and expand their businesses or to cover working capital.

Prospa could help your business finance:

  • A renovation
  • An IT upgrade
  • A marketing campaign
  • Construction equipment
  • Your website
  • Supplier invoices
  • Short term cash flow

Some FAQs about business loan interest rates

What is the average interest rate on a business loan?

So, how do lenders decide on interest rates? In short, business loan interest rates are affected by many things including the finance product you choose (business loan, equipment loan, business overdraft, line of credit, credit card etc), how much you borrow, what you plan to do with the funds, whether you choose a secured or unsecured business loan, whether the rate is a fixed rate or variable rate and other loan criteria including your credit score.

Before you apply for a business loan you can find out more information about what fees and charges or other terms and conditions apply to the individual lender’s product.

At Prospa we look at the ‘health’ of your business to determine the loan amount offered the interest rate we charge you. We look at things like the industry you’re in, how long your business has been operating, and your cash flow situation.

To get an indication of how much a loan might cost at Prospa, you can check out our loan calculator. Then talk to our friendly customer service team to see how they can help you get a suitable product for your small business needs.

 

How can I get a government business loan?

The Australian government offers support in the form of grants and other programs designed to help small businesses develop – and assist with building skills and knowledge. In some cases, low interest business loans may be available to businesses that meet quite strict criteria – such those in the rural or farming industry. Most of the financial assistance from Government comes in the form of rebates.

If you’re looking to get some financial assistance to grow your business or to help you through a busy period, Prospa offers Small Business Loans of up to $300,000 or a Line of Credit of up to $100,000. Find out more or talk to us today about our loan criteria on 1300 882 867 to see if you qualify. Prospa is fully accredited with Australian credit licence 454782.

 

How is an interest rate calculated?

Put simply, using a simple interest rate, if you borrow $1,000 (the principal) for a year and have to pay a total interest of $100 (the interest) for the year, your interest rate is 10%. It’s the interest divided by the principal written as a percentage.

The above business loan interest rate a shown as a simple interest rate, but other interest rate metrics can be used which account for different factors. There are many factors to consider when calculating interest rates and interest – for instance if you were to borrow the money over a shorter timeframe or whether the interest is compounded, when the principal is repaid and other factors.

When you get a Small Business Loan with Prospa, your total interest percentage is calculated upfront over the loan term. This is then included as part of your fixed, regular repayments. You know what you owe up front, when it’s due and applicable fees. You are free to make extra repayments and there’s no penalty for early repayment (in fact, you can talk to us about how our early repayment policy could provide you with a discount for early repayment).

 

What are the different types of interest rates?

When you apply for a loan, all you really want to find out is: ‘What will this cost me?’ But before you enter into a loan agreement, it is important to understand the different types of business loan interest rates and how interest is calculated so you can make an informed decision about your money without overcommitting.

  • Interest – Interest is the main cost of borrowing the money, normally shown as a percentage. The interest is added to your loan amount along with any fees, so when you make repayments you’ll be paying back the loan amount and the amount it costs you to borrow the money.
  • Fixed Rate Interest – This is a set percentage of the loan amount that has to be repaid during the loan term. Fixed rates tend to be slightly higher than variable rates, but this is balanced by the fact that your repayments will not change for the life of the loan.
  • Variable Rate Interest – This lets the borrower take advantage of market conditions as the loan interest rate varies according to the market. It allows you to benefit from future drops in interest rates, but can also mean you have to weather increases in market rates in Australia.
  • APR – The Annual Percentage Rate is the rate that can be used to calculate the cost of the loan. It takes into account the reducing balance of the loan amount, expressed as an annual rate, and may include fees and charges. APR is used as a common comparison for all loans in Australia. Read more about APR.
  • Simple Interest – This is the most basic way to express interest and is calculated on the total interest amount divided by the total principal amount of the loan.
  • Compound interest – This is calculated on the principal amount of the loan but also on the interest accumulated (but unpaid) from previous periods. It’s like paying interest on your interest, and can be common with credit cards.

With Prospa everything is crystal clear, we offer fixed rates on our business loans – so you’ll know up front exactly how much you owe over the loan term.