Business term loans explained
A business term loan is a lump sum repaid over a fixed period with regular repayments, as against a line of credit you draw and repay as needed. Terms run from a few months at the online lenders to 30 years at the banks when property is the security, and the term you are offered is set by the security more than by the business. Here is what the lenders publish.
- A term loan suits a one-off purchase or project with a known cost; a line of credit suits recurring cash flow gaps
- Banks publish terms of 1 to 30 years, with the long end reserved for loans secured by property; unsecured bank terms are capped around 7 years
- Online lenders publish 3 months to 5 years, with Prospa restricting terms beyond 3 years to loans over $150,000
- Fixed rates are available for up to 10 years at ANZ; most online lenders quote a fixed rate for the whole term
- Business loans are not regulated consumer credit: no Best Interests Duty applies, so ask any broker how they are paid
WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees, or other loan amounts might result in a different comparison rate. Comparison rates are based on a secured loan of $30,000 over 5 years for vehicle finance and $50,000 over 5 years for equipment finance, as required under the National Credit Code.
What is a business term loan?
A loan for a set amount, repaid over a set period with scheduled repayments, usually monthly or weekly. Once the loan is drawn the balance only falls, and once it is repaid the facility ends. That makes it the right shape for a purchase with a known price, a fit-out, an acquisition, or refinancing other debt, and the wrong shape for a business that needs to draw and repay repeatedly, which is what a line of credit or overdraft is for.
What terms, rates and security do lenders publish?
Checked against each lender's published page on 20 September 2026. Terms change without notice; confirm the current position with the lender or your broker before relying on it. Where a lender does not publish a figure the cell says so.
| Lender | Loan size | Term | Rate type | Security | Other published terms |
|---|---|---|---|---|---|
| ANZ Business Loan | From $10,000 | 1 to 30 years; up to 30 years for loans under $5M secured by residential or commercial property | Variable, or fixed for up to 10 years (5 years if interest is paid in advance) | Secured or unsecured; residential, commercial or rural property, business assets or a mix | Interest-only up to 10 years where group lending is under $5M and the term is 20 years or more |
| CommBank BetterBusiness Loan | Not published | Up to 30 years depending on security; unsecured variant limited to $250,000 and 7 years | Variable or fixed | Secured or unsecured | One-off establishment fee; $35 monthly service fee; 0.49% p.a. redraw balance fee on redraw over $100,000 |
| Unity Bank | Not published | Up to 7 years | Fixed | Equipment or other security | $250 establishment fee; $0 monthly fee; early termination fee at least 1.00% of the loan |
| Prospa | $5,000 to $500,000 | Up to 5 years; terms over 3 years only for loans over $150,000 | Fixed for the term | No upfront security to $150,000; property ownership required above that | Response in as little as one hour in business hours |
| Moula | $10,000 to $500,000 | Up to 5 years | Fixed | Unsecured | 12 months trading; $10,000 monthly sales; GST registered |
| OnDeck | $10,000 to $300,000 | 6 to 30 months | Fixed | Unsecured | 12 months trading; $100,000 annual revenue; no major credit issues |
| Bizcap | $5,000 to $7.5M | Not published | Not published | Unsecured and secured | 4 months trading; $12,000 monthly revenue |
| Fifo Capital | Up to $5M | 3 to 36 months | Not published | First or second mortgage, LVR up to 90% | Property-backed short-term lending |
How is the term decided?
By the security first and the purpose second. A loan secured by property can run to 30 years at ANZ and CommBank because the lender is lending against the asset; an unsecured bank loan is capped at about 7 years and $250,000; an unsecured online loan runs to 5 years at most, and at Prospa only past 3 years for amounts over $150,000. Within those limits the sensible term is the working life of what you are buying: five years for a vehicle or fit-out, longer for premises, shorter for stock or a project with a defined end.
Fixed or variable?
Online lenders quote a fixed rate for the whole term, so the question only arises at the banks. ANZ publishes fixed terms up to 10 years when interest is paid in arrears and up to 5 years when it is paid in advance, the latter being a tax-timing option. A fixed rate gives repayment certainty and usually carries break costs if you repay early; a variable rate moves with the market and can generally be paid down without penalty. For a loan you may refinance or clear early, variable is the safer default.
What does a term loan cost beyond the rate?
Establishment fees, which range from a fixed figure (Unity Bank publishes $250) to a percentage of the loan at some online lenders; monthly service fees (CommBank publishes $35); redraw fees on large redraw balances (CommBank 0.49% p.a. over $100,000); and early termination fees on fixed loans (Unity Bank publishes at least 1.00%). Online lenders often quote a total payback figure rather than a rate. Compare the total amount repaid over the term, which the business loan calculator shows for any rate and term.
Is a term loan the right product?
Yes if the amount and the purpose are fixed and the asset outlives the term. No if you will need to draw again in six months, in which case a line of credit avoids reapplying, or if the purchase is a vehicle or piece of equipment, where asset finance secured on the item is usually cheaper than an unsecured term loan. The borrowing capacity guide covers how the amount is set.
Keep reading
Related guides.
Frequently asked questions
What is the difference between a business term loan and a line of credit?
How long can a business term loan be?
Can a business term loan be interest-only?
Are business loans covered by responsible lending rules?
Do I need security for a term loan?
Need a fixed sum over a fixed term?
Answer a few quick questions and a licensed broker partner will match the amount, security and term to the lenders whose published limits fit. Free, no obligation.