What Are Business Loans?

Business loans are financial products designed to help companies access capital to manage operations, invest in growth, or cover unexpected expenses. Traditionally, these loans come from banks and financial institutions, often requiring lengthy paperwork, rigid eligibility, and delayed access to funds.

But here’s the rub: traditional business loans are outdated.

They’re often slow, expensive, and inflexible, especially for small and medium-sized businesses (SMEs). That’s why alternative finance solutions like Cloudfloat are rising built for modern businesses that need speed, simplicity, and control over cash flow.

Types of Business Loans in Australia

Here’s a breakdown of the major business loan types available in Australia today:

Term Loans

Best for: Long-term investments (equipment, real estate)

• Lump sum loan

• Fixed/variable interest

• Repaid over time (1–10 years)

• Requires strong financials

Read more about small business loans →

Short-Term Business Loans

Best for: Covering urgent shortfalls or short-term projects

• Loan terms for 3-18 months

• Often unsecured

• Higher interest rates, but fast access

📌 Explore short-term business loans →

Line of Credit

Best for: Managing working capital and short-term needs.

• Revolving credit (like a business credit card)

• Pay interest only on the amount used

Explore Lines of Credit →

Invoice Financing

Best for: Getting paid faster on outstanding invoices.

• Borrow against unpaid invoices

• Helps with cash flow gaps

Explore Invoice Finance Options →

Equipment Loans

Best for: Buying or leasing machinery and vehicles.

• The equipment is often collateral

• Structured to match depreciation

Merchant Cash Advances

Best for: Retail or ecommerce businesses with steady card sales.

• Repayments are a % of daily card sales

• Fast but expensive

Alternative Financing: Cloudfloat

Best for: Businesses wanting instant cash flow without loans.

• Pay suppliers now, repay over 30/60/90 days

• No hidden costs

• Instant approvals for verified SMEs

  
  

Pros and Cons of Each Business Loan Type

Key Factors to Consider When Choosing a Loan

Loan Amount

Do you need $5K or $500K? Larger loans typically require more security and paperwork.

Repayment Terms

Short-term = faster repayment but higher costs. Long-term = lower monthly burden but more interest.

Interest Rates

Compare APRs - but also watch out for hidden fees, early exit penalties, and setup costs.

Speed & Simplicity

How long can your business wait? If you need capital today, traditional loans won’t cut it.

Eligibility & Documentation

Banks often require:

• ABNs

• GST registration

• 6+ months of trading history

• Financial statements

Cloudfloat simplifies this: upload an invoice, pay your supplier today and pay us back over time.

How to Apply for a Business Loan in Australia

Applying for a business loan can feel overwhelming especially with the amount of paperwork, waiting, and approvals involved. But understanding the process helps you avoid roadblocks and choose the right path for your business.

Here’s a step-by-step breakdown of how to apply for a traditional business loan and how it compares to faster alternatives like Cloudfloat.

✅ Step 1: Know What You Need

Before applying, clearly define:

• Loan Purpose: Cash flow? Inventory? Equipment?

• Amount Needed: Overestimate slightly to ensure coverage.

• Repayment Ability: Can your revenue service the repayments?

🧠 Tip: Lenders want to see you're borrowing for growth, not survival.

✅ Step 2: Choose the Right Loan Type

Match your needs to a loan product:

• Term Loan: Large, one-off purchases

• Line of Credit: Ongoing working capital

• Invoice Finance: Slow-paying clients

• Equipment Loan: Vehicle or asset purchase

📌 Or skip the loan entirely with a flexible payment tool like Cloudfloat to spread invoice costs without debt.

✅ Step 3: Check Your Eligibility

Most lenders require:

• An ABN (Australian Business Number)

• Minimum 6–12 months trading history

• Proof of stable cash flow

• GST registration (for many lenders)

• Business and personal credit scores
  

✅ Step 4: Prepare Your Documents

Be ready with:

• Business financials (Profit & Loss, Balance Sheet)

• Bank statements (past 6–12 months)

• Tax returns (personal & business)

• Business plan or loan purpose statement

• Identification documents (Driver’s license, ABN registration)

📎 For startups, include forecasts and any secured contracts or purchase orders.

✅ Step 5: Apply Online or In-Branch

Traditional Loan Application:

• Apply through a bank or lender website

• Submit required documents

• Wait for review (can take 1–3 weeks)

• Respond to any requests for clarification

• If approved, receive funding after contracts are signed

🕓 Typical wait time: 2–4 weeks

✅ Step 6: Consider a Faster Alternative - Cloudfloat

With Cloudfloat, there’s no application in the traditional sense. It’s fast, digital, and frictionless.

Cloudfloat’s Easy Process:

1. Sign up online in minutes — no long forms.

2. Verify your account (Email, Business & Identity).

3. Upload an invoice you want paid.

4. Choose your payment terms (30, 60, or 90 days).

5. Get the invoice paid on the same day.

6. Repay Cloudfloat later, with a small fixed fee.

🚀 No credit checks. No waiting. No loan contracts.

👉 Upload your first invoice today→

✅ Step 7: Review Terms Carefully

Whether you’re applying traditionally or using an alternative provider:

• Look at interest rates and fees

• Understand early repayment penalties

• Check for automatic renewals

• Confirm total repayment amount
  

✅ Step 8: Get Funded

Once approved:

• Traditional lenders will transfer lump sums to your business account

• Alternative providers like Cloudfloat will pay your supplier or invoice directly

🎯 The difference? With Cloudfloat, you can have funds flowing the same day not weeks later.

Real Life Scenarios: Loans vs Cloudfloat

📦 Scenario 1: Retailer With Seasonal Peaks

Problem: Struggles to stock up before peak season due to cash flow gaps.
Traditional Loan: Takes 3–4 weeks, too late to act.
Cloudfloat: Uses Cloudfloat to pay supplier today, repays over 60 days as stock sells.

🛠️ Scenario 2: Tradie Waiting on Invoices

Problem: Cash tied up in unpaid invoices.
Invoice Finance: Releases funds but takes a chunk as a fee.
Cloudfloat: Uses Cloudfloat to cover supplier costs upfront, keeps profits intact.

💻 Scenario 3: SaaS Startup Scaling Fast

Problem: Wants to hire and invest but doesn’t want debt on the books.
Term Loan: Requires full financials, credit score, delays.
Cloudfloat: No debt just smoother supplier payments to free up cash for growth.

Ready to Unlock Cash Flow Without the Loan?

Skip the red tape and reclaim control of your business cash flow today with Cloudfloat.

Try it now and your first invoice fee is on us.

FAQs

What’s the best loan for a startup?

Lines of credit or alternative providers like Cloudfloat especially if you’re not profitable yet or want flexibility.

Are there only 4 types of loans?

There are many types including term loans, lines of credit, invoice financing, equipment loans, and now modern fintech options like Cloudfloat.

What is an SBA loan in Australia?

Australia doesn’t have an SBA equivalent. Government support comes through programs like SME Recovery Loans or business grants.

What are the most common business loans?

Term loans and lines of credit are most traditional. But alternatives like invoice finance and fintech options are growing rapidly.

What is the easiest business loan to get?

Cloudfloat, invoice finance, and merchant cash advances are often faster and easier to get than bank loans.

Which loan is best to start a business?

Consider a flexible line of credit or a solution like Cloudfloat to manage early supplier payments without taking on traditional debt.

Can you get a business loan with no deposit?

Yes, unsecured business loans and alternative platforms like Cloudfloat don’t require upfront collateral or deposits.

👉 Explore Cloudfloat’s flexible financing options today.