One of the most common questions Australian business owners ask when they start looking for funding is whether they need a deposit. If you have only ever dealt with banks, you might assume a deposit is standard. The reality is more nuanced, and in many cases, a deposit is not required at all.
This guide explains when deposits are required, when they are not, and what lenders actually look for when a deposit is off the table.
The Short Answer: Usually No
If you are applying for an unsecured business loan through an alternative lender like Velociti Capital, you do not need a deposit. Unsecured business loans are assessed on the strength of your business — primarily your cash flow, revenue, and trading history — rather than on upfront capital contributions.
Velociti Capital offers unsecured business loans from $10,000 to $350,000 with no deposit required. Approval is based on how your business is performing today, not on how much cash you can put down upfront.
That said, not every type of business loan works this way. Whether a deposit is required depends on the type of lender, the loan product, and the amount you are borrowing.
When Do Banks Require a Deposit?
Traditional banks in Australia typically require a deposit or equity contribution for certain types of business lending. This is most common with:
Secured Business Loans
When you borrow against an asset — such as commercial property, a vehicle, or equipment — banks often require the borrower to contribute a percentage of the purchase price upfront. This deposit reduces the lender’s exposure and is sometimes referred to as an equity contribution or loan-to-value ratio (LVR) requirement.
For example, a bank might fund 70% to 80% of a commercial property purchase, requiring you to provide the remaining 20% to 30% as a deposit. For equipment finance, the deposit might be 10% to 20% of the asset value.
Commercial Property Loans
Banks typically require deposits of 20% to 30% for commercial property purchases. Some may accept a lower deposit if you provide additional security, such as equity in residential property, but the expectation of a meaningful upfront contribution remains.
Start-Up Business Loans
Banks are generally reluctant to lend to businesses with less than two years of trading history. When they do, they almost always require a substantial deposit or personal assets as security. This is because the business lacks the financial track record that a bank needs to assess risk.
When Is a Deposit Not Required?
Several types of business finance do not require any deposit at all. Understanding these options can save you time and open up funding pathways you might not have considered.
Unsecured Business Loans
Unsecured business loans are the most common type of no-deposit business finance. Because these loans are not tied to a specific asset, there is no purchase price to contribute towards. The lender assesses the application based on your business performance rather than asset values.
With lenders like Velociti Capital, the assessment focuses on your bank statements, cash flow patterns, and revenue consistency. If your business demonstrates the capacity to service the repayments, a deposit is simply not part of the equation.
Revenue-Based Financing
Some lenders offer financing that is repaid as a percentage of your daily or weekly revenue. These products do not require deposits because they are structured around your business income rather than asset ownership.
Lines of Credit
Business lines of credit provide a revolving facility you can draw on as needed. Most do not require a deposit, though they may require a minimum trading history and revenue level.
Short-Term Working Capital Loans
Loans designed to cover cash flow gaps, tax obligations, or urgent expenses are typically deposit-free. These are short-term products (3 to 12 months) assessed on your ability to repay from business cash flow.
Secured vs Unsecured: How Deposit Requirements Differ
The deposit question often comes down to whether the loan is secured or unsecured. Here is how the two compare:
| Feature | Secured Loan | Unsecured Loan |
|---|---|---|
| Deposit required | Often 10%–30% | No |
| Collateral required | Yes — specific asset pledged | No specific asset required |
| Typical loan amounts | $50,000 to $1 million+ | $5,000 to $500,000 |
| Approval timeframe | 2–8 weeks | 24–48 hours |
| Best suited for | Property purchases, large equipment | Working capital, growth, short-term needs |
For businesses that need funds quickly and do not want to tie up capital in a deposit, no-collateral business loans are often the more practical choice.
What Do Lenders Look for Instead of a Deposit?
When a deposit is not required, lenders need other ways to assess risk. Here is what unsecured lenders typically evaluate:
Cash Flow
This is the single most important factor. Lenders review your business bank statements — usually the last 3 to 6 months — to understand your income and expenses. They are looking for:
- Consistent revenue flowing into the account
- Manageable outgoings that leave room for loan repayments
- No patterns of financial distress such as frequent overdrafts or dishonoured payments
Monthly Revenue
Most unsecured lenders have minimum revenue thresholds. Velociti Capital, for example, assesses based on your actual bank statement data to determine how much your business can comfortably afford to repay.
Trading History
A minimum trading history — typically 6 to 12 months — demonstrates that the business is established and generating ongoing revenue. Longer trading histories generally strengthen an application.
Industry
Some industries carry higher risk profiles than others. Lenders factor in the typical cash flow patterns, seasonality, and stability of your industry when assessing an application.
Existing Debt
Your current loan obligations and credit commitments are reviewed to ensure that taking on additional debt is sustainable. A business with manageable existing commitments is in a stronger position than one that is already highly leveraged.
Director’s Credit History
While unsecured business loans focus heavily on business performance, the director’s personal credit history is still considered. Significant defaults, bankruptcies, or court judgments can affect the outcome. That said, some lenders are more flexible than others — see our guide on how to get a business loan with bad credit for more information.
How to Improve Your Chances Without a Deposit
If you are applying for a no-deposit business loan, here are practical steps to strengthen your application:
1. Clean Up Your Bank Statements
Lenders will scrutinise your bank statements closely. In the months before you apply, aim to:
- Avoid dishonoured payments or overdrawn accounts
- Minimise irregular or unexplained large withdrawals
- Ensure business income is clearly flowing through the account
2. Demonstrate Consistent Revenue
Stable or growing revenue is the strongest signal you can send. If your revenue is seasonal, make sure you can explain the patterns. Lenders understand seasonality — they just need to see that the overall trend is healthy.
3. Reduce Existing Debt Where Possible
Paying down existing credit commitments before applying improves your debt serviceability ratio. If you have high-interest debts, consider whether refinancing could improve your position before taking on new lending.
4. Have a Clear Purpose for the Funds
Lenders want to understand how the loan will be used. A clear, business-related purpose — whether it is purchasing stock, covering a tax bill, or funding a growth initiative — demonstrates planning and intent.
5. Prepare Your Documentation
Having your details ready speeds up the process and signals that you are organised. For most unsecured lenders, you will need:
- Active ABN
- Business bank statements (3–6 months)
- Director identification
- Basic business details (industry, revenue, time in business)
For a complete list, see our business loan application checklist.
Common Misconceptions About Business Loan Deposits
”All business loans require a deposit”
This is not true. Unsecured business loans, lines of credit, and revenue-based financing products typically require no deposit. The deposit requirement is largely specific to secured lending products, particularly property and equipment finance.
”No deposit means higher interest rates”
Not necessarily. While unsecured loans generally carry higher rates than secured products (because the lender takes on more risk without asset backing), the absence of a deposit specifically does not drive the rate higher. The rate is determined by the overall risk profile of the business, not whether a deposit was paid.
”You need perfect credit to avoid a deposit”
Strong credit helps, but it is not the only factor. Alternative lenders assess the whole picture — cash flow, revenue, trading history, and industry. A business with strong cash flow and minor credit blemishes can still qualify for no-deposit funding.
”Only large businesses can borrow without a deposit”
Small and medium businesses are the primary users of unsecured, no-deposit business loans. Velociti Capital’s lending range of $10,000 to $350,000 is designed specifically for Australian SMEs.
Frequently Asked Questions
Can I get a business loan with no deposit and no collateral?
Yes. Unsecured business loans do not require a deposit or specific assets as collateral. Lenders assess your application based on business cash flow, revenue, and trading history. Velociti Capital offers no-collateral business loans from $10,000 to $350,000.
How much deposit do banks typically require for a business loan?
It varies by product. For commercial property loans, banks generally require 20% to 30%. For equipment finance, 10% to 20% is common. For unsecured lending products, no deposit is required.
Will not having a deposit affect the amount I can borrow?
With unsecured lenders, the amount you can borrow is determined by your business cash flow and revenue, not by a deposit. The stronger your cash flow, the more you may be able to borrow — up to the lender’s maximum.
Can a start-up get a business loan without a deposit?
Start-ups with at least 6 months of trading history and consistent revenue may qualify for unsecured business loans without a deposit. Businesses with less than 6 months of trading history will have fewer options and may need to explore other funding sources.
How quickly can I get a no-deposit business loan?
Alternative lenders can often assess and fund applications within 24 to 48 hours. This is significantly faster than secured lending, where the asset valuation and documentation requirements extend the timeline to weeks.
Next Steps
If you are looking for a business loan without a deposit, the process is straightforward. Unsecured lenders focus on your business performance — not your upfront capital — so the key is demonstrating strong, consistent cash flow.
Apply now to see what funding is available for your business, or explore our fast business loan page to learn more about how the process works.
This article is part of our loan guides series. For more information, read our guides on unsecured business loans and how to apply for a business loan in Australia.
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