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What's best for your small business: A Business Loan or Line of Credit?

6 March 2020

Business loans and lines of credit are two common methods for giving your business bank account a boost, but which is best for you? There are a few things to consider that may help you decide.

How much can I borrow?

The first steps to funding your business are to work out how much money you’ll need, and what type of financing suits your requirements.

Line of credit

A Business Line of Credit gives you the flexibility to borrow however much you need, when you need it, up to an approved limit. As long as you keep the loan balance below the credit limit, you decide how often and how much to pay off. Want more info? Feel free to chat to a Business Banking Manager today!

Business loan

Our Business Essentials Loan offers finance up to $3 million. Beyond that, there’s our Commercial Business Loan. Unlike a line of credit, business loans have set monthly repayments and an ‘end date’, meaning they have to be repaid by a certain point in time. Get in touch to discuss the best solution for your business.

Approval process

The approval processes for both a business loan and line of credit are pretty similar. Suncorp – like most other lenders – require detailed projections and business plans, and may need the business to have been operating for a certain amount of time, so they can demonstrate an established trading history. Other factors that can affect loan approval include the experience of the business owner (or owners), lifecycle of the business, industry and economic analysis, and the owners’ ability to build equity over time.


Line of credit

A Business Line of Credit is flexible. You’re in control of how much you borrow, and you only pay interest on funds you use. There’s no set time for when the loan needs to be fully repaid – it’s an ongoing limit – and extra repayments are accepted, with the option to redraw if needed. A Business Line of Credit also has flexible security options; residential, commercial or industrial property, business assets, or a combination of these.

Business loan

A Suncorp Business Loan offers flexible repayment options to suit your cash flow needs. You can choose principal and interest or interest only repayments on a weekly, fortnightly, or monthly basis. You can pay more than your required minimum monthly repayment and make additional lump-sum payments. You also have the option to split your loan across fixed and variable rates. And, like a Business Line of Credit, a Business Loan also has flexible security options.

Mixing personal and business finances

A business loan or line of credit is a great way to keep your personal and business finances separate, which may save you a ton of time come tax season. But even if you don’t choose one of these to finance your small business, you can still do this with a business bank account. Plus, when you open a new Suncorp Business Premium Account, there are no account keeping fees!

Deciding how to boost your business’ finances can be daunting. Learn how to apply for a business loan or speak to a specialist who can discuss your unique requirements and help you find the best solution.

Find a Business Banking Manager

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Information is intended to be of a general nature only and any advice has been prepared without taking into account any person's particular objectives, financial situation or needs. You should make your own enquiries, consider whether advice is appropriate for you and read the relevant Product Disclosure Statement or Product Information Document before making any decisions about whether to acquire a product.

Handy Tools

Business Loan Repayment Calculator