Compare finance types
Low-doc loan vs Trade finance: which is right for your business?
The main difference between a low-doc business loan and a trade finance is how they are secured and repaid: a low-doc business loan suits established businesses without up-to-date financials, while a trade finance suits importers, wholesalers and distributors with proven sales and reliable suppliers.
Low-doc loan vs Trade finance at a glance
| Low-doc business loan | Trade finance | |
|---|---|---|
| What it is | A low-doc business loan is finance assessed on bank statements, ABN history and credit record rather than full financial statements and tax returns. Low-doc does not mean no documents or automatic approval. | Trade finance is a revolving facility that pays your suppliers for goods at the time of order and gives your business 60–180 days to repay, bridging the gap between paying for stock and being paid for it. It covers both imported and domestic purchases. |
| Amount | $5,000 – $250,000 | $50,000 – $5,000,000 |
| Term | 3–36 months | 2–6 months |
| Indicative rate | 12% – 32% p.a. | 9% – 20% p.a. |
| Rate type | Fixed or variable | Variable |
| Security | Unsecured (guarantee may apply) | Secured by receivables |
| Repayments | Daily, weekly or monthly | Each drawdown repaid in full at the end of its term |
| Typical speed | 24–48 hours | 1–3 weeks to establish, then 24–48 hours per drawdown |
| Best for | Established businesses without up-to-date financials | Importers, wholesalers and distributors with proven sales and reliable suppliers |
| Consider the other if | Larger amounts where full-doc pricing is materially cheaper | Service businesses with no stock, or one-off purchases that do not justify a facility |
| Tax | Interest on business-purpose borrowing is generally deductible. | Interest and facility fees on trade borrowing are generally deductible. Confirm with your accountant. |
Rates shown are indicative ranges observed across our lender panel for the period stated. They are not an offer or quote. Your rate depends on your business, the lender, the amount, the term and the security offered. The lender makes the final credit decision.
When to choose a low-doc business loan
A low-doc business loan is usually the better fit for established businesses without up-to-date financials. Its main advantages are fewer documents, fast decisions. Consider the alternative if larger amounts where full-doc pricing is materially cheaper.
When to choose a trade finance
A trade finance is usually the better fit for importers, wholesalers and distributors with proven sales and reliable suppliers. Its main advantages are pay suppliers upfront and often negotiate better pricing, revolving limit recycles with each repayment, works alongside invoice finance to cover the full cycle. Consider the alternative if service businesses with no stock, or one-off purchases that do not justify a facility.
Low-doc business loan
A low-doc business loan is finance assessed on bank statements, ABN history and credit record rather than full financial statements and tax returns. Low-doc does not mean no documents or automatic approval.
Trade finance
Trade finance is a revolving facility that pays your suppliers for goods at the time of order and gives your business 60–180 days to repay, bridging the gap between paying for stock and being paid for it. It covers both imported and domestic purchases.