Many businesses, big and small, may be looking into additional finance options in response to the current economic conditions caused by COVID-19. Read on to find out which business loans and overdrafts on Canstar’s database picked up 5-Star Ratings this year.
Figures from the Australian Bureau of Statistics (ABS) suggest nearly three quarters (72%) of all Australian businesses are expecting an adverse impact caused by reduced cashflow in light of the coronavirus pandemic, while two in five (41%) businesses anticipate a reduced ability to pay operating expenses.
In this environment, having access to additional funding can be crucial to a business’s short and long-term operating plan, and in response to the crisis the Federal Government has set up the Coronavirus SME Guarantee Scheme, which is designed to make it easier for eligible small to medium-sized businesses to be approved for “new unsecured loans to be used for working capital”.
While some businesses may need an injection of cash to help them weather the impact of the pandemic, others may look to their bank for funding to help capitalise on increased demand. A loan may also be useful for those businesses gearing up for a strong bounce back once they’re able to return to business as usual.
To help businesses find a product appropriate for their circumstances, Canstar has rated 81 business loans and business overdrafts from 16 providers on our database and determined which ones offer Outstanding Value to businesses.
Eligible business loans were assessed based on both their comparative pricing and feature offerings. Pricing was determined based on interest rates as well as any upfront or ongoing fees charged. The features include more than 100 distinct product factors for each business loan assessed. Features were scored, categorised and weighted according to a customer’s journey with the product being assessed.
Some of the features considered include the availability of the loan for a range of purposes, approval requirements, guarantee and security options and the flexibility offered to customers in managing the business loan. Customers’ ability to vary the loan if required and the support channels offered by the provider were also considered.
Products were rated against at least one of the six borrower profiles below:
Below are the business loan products that won a 5-Star Rating in each profile, sorted by provider name (alphabetical order).
ANZ | Business Overdraft – Commercially Secured |
Heritage Bank | Bus Line Of Credit – Non-Residentially Secured |
Westpac | Business Equity Access |
BankSA | Business Maximiser |
Bank of Melbourne | Business Maximiser |
Heritage Bank | Business Line of Credit – Residentially Secured |
St.George Bank | Business Maximiser |
Westpac | Business Equity Access |
ANZ | Business Overdraft – Unsecured |
NAB | Business OD Prime |
ANZ | Business Loan Variable – Commercially Secured |
Bankwest | Business Low Rate Loan- All Securities |
Suncorp Bank | Business Essentials – Commercial |
ANZ | Business Loan Variable – Residentially Secured |
ANZ | Business Mortgage Loan Variable |
Bankwest | Business Low Rate Loan- Resientially Secured |
Suncorp Bank | Business Essentials – Residential |
ANZ | Business Loan Variable – Unsecured |
NAB | Business Options Interest-Only Standard |
For more information on how the results were calculated, read the methodology. You can also view the full results of this year’s Business Loan Star Ratings.
This advice is general and has not taken into account your objectives, financial situation, or needs. It is not personal advice. Consider whether this advice is right for you, having regard to your own objectives, financial situation and needs. You may need financial advice from a suitably qualified adviser. For more information, read Canstar’s Financial Services and Credit Guide (FSCG) and our detailed disclosure. Canstar may receive a fee for referring you to a product provider – for further information, see how we get paid. Payment of fees for ads does not influence our Star Ratings or Awards.
Canstar is a comparison website, not a product issuer, so it’s important to check any product information directly with the provider. Consider the Product Disclosure Statement (PDS), Target Market Determination (TMD) and other applicable product documentation before making a decision to purchase, acquire, invest in or apply for a financial or credit product. Contact the product issuer directly for a copy of the PDS, TMD and other documentation.
Canstar is an information provider and in giving you product information Canstar is not making any suggestion or recommendation about a particular credit product or loan. If you decide to apply for a credit product or loan, you will deal directly with a credit provider, and not with Canstar. Rates and product information should be confirmed with the relevant credit provider. For more information, read the credit provider’s key facts sheet and other applicable loan documentation for that product. Read the Comparison Rate Warning.
Before you elect to terminate or modify existing lending arrangements, it is recommended that you consider all associated fees and application costs, as well as the timing and impact these changes could have on your wider financial arrangements and personal circumstances.
The Star Ratings referred to in this article were published in May, 2020. View the Canstar Business Loans Star Ratings methodology and results for more information. The results do not include all providers and may not compare all features relevant to you. They do not constitute a suggestion or recommendation about any particular business loan product, and Canstar is not providing a recommendation for your individual or business circumstances. Products referred to this article are not intended to be used for personal, domestic or household purposes.
Star Ratings are only one factor to take into account when considering products. Current rates and fees may be different to what was rated. Costs, features and other product information should be confirmed with the relevant product provider. If you decide to apply for a business loan, you will deal directly with the provider, not with Canstar. Read our FSCG.
Any advice provided on this website is general and has not taken into account your objectives, financial situation or needs. Consider whether this advice is right for you. Consider the Product Disclosure Statement and Target Market Determination before making a purchase decision. Canstar provides an information service. It is not a credit provider, and in giving you information about credit products Canstar is not making any suggestion or recommendation to you about a particular credit product. Research provided by Canstar Research AFSL and Australian Credit Licence No. 437917. You must not reproduce, transmit, disseminate, sell, or publish information on this website without prior written permission from Canstar.