Business lending is a different world to personal or home lending. Instead of one product doing most of the work, there's a whole toolkit of loan types, each built for a different purpose, cash flow pattern, or asset. Picking the wrong one doesn't just cost you more — it can genuinely strain a business that's otherwise doing fine.
A term loan is the most familiar shape: you borrow a fixed amount, over a fixed term, with regular repayments — similar in structure to a home loan. It suits a clear, one-off need, like buying out a business partner, funding a specific expansion project, or covering a large upfront cost where you know exactly how much you need and roughly how long it'll take to pay back.
A line of credit works differently. Instead of receiving a lump sum, you're approved for a limit you can draw down against as needed, and you only pay interest on what you've actually used — much like a business credit card, but usually at a lower rate and with a higher limit. This suits businesses with lumpy or seasonal cash flow, where the need for funds comes and goes rather than sitting at one constant level.
Equipment and asset finance is secured against the specific thing you're buying — a vehicle, machinery, tech hardware, whatever the business needs to operate. Because the asset itself is the security, lenders are often more comfortable extending finance here than for unsecured lending, even to newer businesses, and the approval process tends to be faster.
Invoice finance — sometimes called debtor finance — lets you borrow against invoices you've already issued but haven't been paid yet. If you're waiting 30, 60, or 90 days for clients to pay, invoice finance advances you a percentage of that money upfront, easing the gap between doing the work and getting paid for it. It's particularly common in industries with long payment cycles, like construction, wholesale, and professional services.
Working capital loans are shorter-term and designed to cover the day-to-day gaps — payroll during a slow month, a stock purchase ahead of a busy season, or bridging a temporary shortfall. They're typically faster to arrange than a term loan, and priced accordingly.
Commercial property loans function similarly to home loans in structure but with different lending criteria — commercial properties are valued and assessed differently, lenders look harder at the property's income-generating potential (if it's an investment) or the business's ability to service the debt (if owner-occupied), and terms are often shorter than the standard 30-year home loan.
Whichever type you're considering, lenders assessing a business loan look at a different set of things than they would for a personal loan. Trading history matters — most lenders want to see at least one to two years of financials, though some specialise in newer businesses. Revenue and cash flow trends matter more than a single strong month. And business structure — sole trader, company, or trust — affects both how the application is assessed and what security might be required.
This is exactly why business finance is one of the areas where a specialist broker matters most. The right loan type for your situation depends on cash flow pattern, what you're funding, how established the business is, and what security you're willing to offer — and getting it wrong can mean either paying for flexibility you don't need or being locked into a structure that doesn't match how the money actually moves through your business. A broker who works in business finance regularly will know which lenders are actively competitive for your type of business, right now — information that changes more often than most people realise.