Business Loan Deposits: How Much Do You Need?

Most business loans in Australia do not require a deposit. Unsecured loans, lines of credit, and working capital products are assessed on cash flow, not upfront capital. Where deposits are required — for equipment finance, commercial property, or business acquisitions — they range from 10% to 50% depending on the loan type. Here is what to expect.

Why the deposit question depends on what you are borrowing for

Unlike home loans, where a deposit is almost always required, business lending in Australia varies dramatically by product type. A business owner applying for a $100,000 unsecured working capital loan faces a completely different deposit requirement — zero — compared to someone buying a $2 million commercial property, where 20% to 30% upfront is standard.

This distinction matters because many business owners assume they need to save a deposit before they can access any form of business finance. In reality, the majority of short-term and unsecured lending products require no deposit at all. Business loan applications in Australia rose 4.1% year-on-year in Q4 2025 (Equifax Business Market Pulse), and a growing share of those applications are going to non-bank lenders that assess on cash flow rather than capital contributions.

Business loan deposit requirements by loan type

The deposit you need — if any — depends on the type of finance you are applying for. Here is how each product category works.

Unsecured business loans: no deposit required

Unsecured business loans are the most common type of no-deposit business finance in Australia. Because these loans are not tied to a specific asset, there is no purchase price to contribute towards. Lenders assess the application based on your business bank statements, revenue consistency, and capacity to service repayments.

Emu Money's lender panel offers business loans from $5,000 to $15,000,000, with unsecured options available up to $500,000 for businesses with strong cash flow. Rates start from 7.99% with terms from 3 months to 5 years. No deposit, no property security — approval depends on how your business is performing today.

Non-bank lenders now hold around 24% of the SME lending market in Australia, and 31% of SMEs prefer non-bank lenders over banks — a preference driven largely by faster approvals and the absence of property or deposit requirements.

Lines of credit and working capital: no deposit required

A line of credit provides a revolving facility your business can draw on as needed. These products are assessed on revenue and trading history, not upfront capital. Most lenders require a minimum of 6 to 12 months of trading and consistent monthly revenue, but no cash deposit.

Working capital loans designed for short-term cash flow gaps — covering payroll, tax obligations, or bridging seasonal dips — are similarly deposit-free. These are typically 3 to 12-month products where repayment capacity, not capital contribution, is the deciding factor.

Equipment finance and chattel mortgage: 0% to 20%

Equipment finance occupies a middle ground. The equipment itself — a vehicle, truck, excavator, medical device, or any business asset — serves as security for the loan. This means many lenders will finance 100% of the purchase price with no deposit required, because they can recover the asset if the loan defaults.

However, deposits of 10% to 20% are common in certain situations. Lenders may request a deposit if your business has less than 12 months of trading history, you do not own residential property, the asset is used or older (higher depreciation risk), or the loan amount is at the upper end of your borrowing capacity.

A deposit on equipment finance is not always a bad thing. Putting 10% to 20% down reduces your repayments and total interest cost over the loan term. For a $100,000 piece of equipment financed over 5 years at 7%, a 20% deposit saves roughly $7,500 in interest compared to financing the full amount.

Secured term loans (property-backed): 10% to 30%

When a business loan is secured against real estate — either commercial or residential property — the lender applies a loan-to-value ratio (LVR). This is where the deposit requirement comes from. The deposit is the gap between the property value and the amount the lender will advance.

Most banks require an LVR of 70% to 80% for property-secured business loans, meaning you need to contribute 20% to 30% of the property value as a deposit or equity. Some lenders will go to 90% LVR if the property is residential and the borrower has strong financials, but this is the exception rather than the rule.

The trade-off is clear: property-secured loans offer lower interest rates — often 2% to 4% below unsecured rates — but they require significant upfront capital and put your property at risk.

Commercial property loans: 20% to 30%

If you are buying business premises — an office, warehouse, retail space, or industrial site — expect to contribute 20% to 30% of the purchase price as a deposit. Standard commercial properties typically require a 20% to 30% deposit. Specialised or high-risk properties such as hospitality venues, petrol stations, or single-tenant buildings may require 30% to 40%. First-time commercial property buyers are often assessed at the higher end of the range.

For a $1 million commercial property at a 25% deposit, you need $250,000 in cash or equivalent equity before the lender will fund the remaining $750,000. Some lenders accept equity in existing residential property as a substitute for cash, which can reduce the amount you need to save — but the total equity contribution requirement remains the same.

Business acquisition loans: 30% to 50%

Business acquisition finance carries the highest deposit requirements in business lending. When you are buying an existing business — a café, a franchise, a trade business, a professional practice — the lender needs to value something inherently difficult to price: goodwill.

For standalone acquisitions where the buyer does not already own a business in the same industry, lenders typically require an equity contribution of at least 30% of the purchase price, and often closer to 50%. Banks value businesses conservatively, and their valuation frequently comes in below the agreed purchase price. If a bank values a business at $800,000 but you have agreed to pay $1 million, the bank will lend against their valuation — meaning your effective deposit is $300,000 or more, not the $200,000 you might have expected.

This catches many first-time business buyers off guard. The deposit requirement for buying a business is more comparable to buying property than to a standard business loan — and in many cases, it is higher.

When a deposit helps even if it is not required

Even for loan types where no deposit is required, offering one can work in your favour. A voluntary deposit reduces the total amount you borrow, which lowers your repayments and total interest cost. It also signals financial discipline to the lender, which can improve your rate or terms.

A deposit increases your chances of approval if your cash flow is borderline. It also gives you a buffer if business conditions change during the loan term.

For equipment finance specifically, a 10% to 20% deposit can be the difference between a rate starting at 5.5% and one starting at 8% or higher. Lenders price risk, and a deposit directly reduces their exposure.

How to access business finance with no deposit

If you do not have capital for a deposit, several pathways remain open.

Unsecured business loans are the most direct option. No deposit, no property security. Approval is based on cash flow and trading history. If you are not sure whether your business qualifies, our guide on how hard it is to get a business loan breaks down the approval factors by lender type.

Equipment finance with 100% funding is available from many lenders for businesses with at least 12 months of trading history and a clean credit record. The equipment serves as security, removing the need for any upfront contribution.

Using existing equity can substitute for a cash deposit. If you own residential or commercial property with available equity, some lenders will accept a guarantee against that equity instead of a cash deposit — even for a separate business loan or acquisition.

Revenue-based financing is a newer category where repayments are calculated as a percentage of daily or weekly revenue. These products carry no deposit requirement and are designed for businesses with strong, consistent turnover.

The lending environment supports these options. The RBA's Small Business Finance Advisory Panel noted in late 2025 that access to finance for SMEs has improved across multiple dimensions, including more competitive pricing, faster approval times, and a broader range of funding products — including improved availability of unsecured and deposit-free finance. Major bank CEOs have publicly confirmed they are competing harder for SME business, with one calling it "the hottest part of the market" in 2026.

This article is general information only and is not financial advice.