When a tradie needs money fast, the first fork in the road is simple: do you put up property as security or not? That one choice shapes how much you can borrow, how quickly it lands, what paperwork you need and how the loan is priced. Here’s a straight comparison to help you pick.
Key takeaways
- Unsecured loans need no property. You’ll need 6+ months trading with an ABN and recent business bank statements. They’re sized to your turnover.
- Secured loans are backed by property you or a guarantor already own. No financials needed, and bad credit is considered.
- Speed: some unsecured loans are funded within hours; property secured loans in as little as 24 hours in some cases.
- Size: unsecured depends on turnover; secured depends on equity, up to $5 million. All loans start at $20,000.
- Both are for business purposes and every loan is priced on your circumstances.
What is an unsecured business loan?
An unsecured business loan isn’t backed by property. The lender looks at how your business is running, mainly through recent business bank statements, often shared through a secure online link. They want to see regular deposits, how the balance moves and whether there are signs of stress like dishonours.
It suits tradies who:
- have been trading for 6+ months with an ABN
- have steady money coming into the business account
- need a smaller amount relative to their turnover
- don’t own property, or don’t want to use it
Read more on our cash flow loans for tradies page.
What is a secured business loan?
A secured business loan is backed by real estate you or a guarantor already own, such as your home, an investment property, commercial property or land with equity. It’s usually set up as a second mortgage behind your existing home loan, a first mortgage, a bridging loan, or in Victoria only, a caveat loan.
Because the lender has property behind the loan, it focuses on your equity and your plan to repay rather than your financials. It suits tradies who:
- need a larger amount
- have tax returns or BAS that are behind
- have had credit problems
- have a clear exit, like progress claims or a property sale
See our fast second mortgage page for how the most common secured loan works.
Note that construction funding is secured against property you already own, not the value of a build you’re working on.
Unsecured vs secured: side by side
| Unsecured | Secured (property) | |
|---|---|---|
| Security | None | Existing property you or a guarantor own |
| Trading history | 6+ months with an ABN | Not the main test |
| Paperwork | Recent business bank statements, ID | ID, property details, home loan statement; no financials |
| Credit history | Case by case | Bad credit considered |
| Loan size | Sized to turnover, from $20,000 | From $20,000 up to $5 million, based on equity |
| Speed | Some approved and funded within hours | As little as 24 hours in some cases; typically a few days |
| Term | Short term | Typically 1 to 12 months |
| Pricing | Priced on your circumstances | Priced on your circumstances; security often helps |
Which one is cheaper?
There’s no fixed answer, because every loan is priced on your individual circumstances. As a general rule, security lowers the lender’s risk, which can help pricing on a secured loan. But an unsecured loan might still be the better option if you need a smaller amount for a few weeks and don’t want to go through a valuation. We find the sharpest rate available for your situation and show you every cost up front, so you can compare properly.
When should a tradie choose unsecured?
- You don’t own property. Plenty of young tradies and renters run strong businesses.
- The amount is modest. For example, a few weeks of wages or a materials order.
- You need it today. Some unsecured loans are funded within hours.
- You want to keep your home out of it. That’s a fair choice if your turnover supports the loan.
Example: A painter in Canberra with three staff has been trading for two years, with steady deposits from builders every fortnight. A head contractor is 30 days late on a $45,000 claim. She takes a $40,000 unsecured loan to cover wages and paint, funded the same day, and repays it when the claim is paid.
When should a tradie choose secured?
- You need a bigger amount. Clearing a large ATO debt, settling on land or finishing a stalled build.
- Your books are behind. No financials are needed for a property secured loan.
- Your credit has taken a hit. Bad credit is considered.
- Your bank statements look messy. A slow few months can make unsecured lending hard, but it matters much less with property security.
- You want a longer runway. Terms of typically 1 to 12 months give you time to complete a job and get paid.
Example: A civil contractor in Townsville needs $400,000 to clear an ATO debt and restart two jobs after a wet season. His statements show a rough quarter, so unsecured lending won’t stretch that far. He has good equity in his home and a rental property. A second mortgage over the rental funds in a few days, and he repays it from the two jobs over nine months.
Can I combine unsecured and secured loans?
Sometimes. A tradie might use a property secured loan for a large one off need, like land or a tax debt, and an unsecured loan for a shorter cash flow gap. The key is making sure total repayments fit your cash flow. A lending specialist can help you work out the right mix.
Quick decision guide
- No property + trading 6+ months + modest amount → unsecured
- Own property + bigger amount → secured
- Books behind or bad credit + own property → secured
- Need it within hours + strong bank statements → unsecured
- Not sure → check your options and we’ll talk you through it
For the fastest turnarounds, see same day business loans for tradies. If your credit history is the sticking point, see bad credit loans for tradies.
Key facts
- Loan size: $20,000 to $5 million
- Unsecured: 6+ months trading with an ABN, sized to turnover, some funded within hours
- Secured: against existing property; no financials; bad credit considered; as little as 24 hours in some cases
- Term: secured loans typically 1 to 12 months
- Purpose: business purposes only
Ready to find out which fits?
You don’t have to work it out alone. Our 60 second form asks a few simple questions, and a lending specialist calls you back with the options that fit. See if you qualify. It costs nothing to enquire, it won’t affect your credit score, and we’ll tell you quickly if we can help.
