Business Loan Agreement Template (Australia)
Updated on 9 August 2026
An Australian business loan agreement documents commercial lending to a business borrower. Whether it's a regulated credit contract or an unregulated commercial loan depends on who the borrower is and what the credit is for: the National Credit Code generally applies to a natural person or strata corporation borrowing predominantly for personal, domestic or household purposes, not to an ordinary business loan to a company.
The widely circulated free version of this agreement has a clause literally titled "Guarantors" that states no guarantor is responsible for anything, an arbitration clause that names no rules body or seat, no security section at all, and hard-codes the currency as US dollars. This template fixes each of those for the Australian market: a working guarantor election, a PPSR-registered security structure, a named Australian arbitration framework, and a currency field.
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Business Loan Agreement
As the Borrower is a company, or the credit is predominantly for business purposes, this is not a regulated credit contract under the National Credit Code.
- Borrower:
- ,
- Lender:
- ,
1. Promise to pay
On , Borrower promises to pay Lender the principal sum of (the "Loan"), with interest accruing on the unpaid balance at percent per annum.
2. Payment
The full balance, including accrued interest and fees, is due on . The Loan shall be repaid as follows:
3. Security
This Loan is unsecured. No security interest secures Borrower's obligations under this Agreement.
4. Guarantor
No person or entity other than Borrower is responsible for repayment under this Agreement.
5. Default
An Event of Default occurs if Borrower fails to make a payment when due, breaches a material term of this Agreement, or becomes insolvent or subject to insolvency proceedings. Upon default, Lender may increase the interest rate to percent per annum.
6. Late payments
If a payment is not received within days of its due date, Borrower shall pay a late fee of percent of the unpaid amount, to the extent permitted by applicable law.
7. Dispute resolution
Any dispute arising under this Agreement shall be resolved by binding arbitration seated in . Where the arbitration is domestic, it shall be conducted under the Commercial Arbitration Act of the seat's state or territory.
This Agreement is governed by the law of .
8. General provisions
Any modification of this Agreement must be in writing signed by both parties. If any provision is held invalid, the remaining provisions remain in full force. This Agreement may be executed in counterparts.
Lender
Date:
Borrower
Date:
Work out whether the National Credit Code applies
The National Credit Code applies to a credit contract where the debtor is a natural person or a strata corporation, and the credit is provided wholly or predominantly for personal, domestic, or household purposes — not to lending to companies generally, and not to credit provided predominantly for business purposes. This template makes the borrower's status and the loan's purpose an explicit field, since an ordinary business loan to a company sits outside the regulated regime.
There's no general interest-rate cap on business lending
Australia has no general statutory interest-rate cap on commercial lending to a business, unlike US state usury laws. Specific caps apply to some regulated consumer credit products (such as small amount credit contracts), but they don't extend to ordinary business lending.
Make the guarantor clause actually work
A clause headed "Guarantors" that states no one but the borrower is responsible isn't a guarantor election — it's confusing drafting. This template makes it a genuine toggle: off, the loan carries no guarantor and the clause says so; on, it names the guarantor and states their liability.
Register security on the PPSR, not a state charge register
Since the Personal Property Securities Act 2009, security over most business assets — equipment, receivables, and other personal property — is registered on the national Personal Property Securities Register (PPSR), administered by the Australian Financial Security Authority, using a Financing Statement. This replaced the old state-based registers and ASIC's Register of Company Charges. A lender that fails to register on the PPSR risks losing priority to another creditor or a purchaser of the secured asset. This template names the PPSR directly rather than referencing a US-style UCC filing or a UK-style Companies House charge, neither of which exists in Australia.
Name a real Australian arbitration framework
"The parties may submit to arbitration chosen by both parties" names no seat, no administering body, and no rules — an arbitration clause this vague won't do its job if a dispute actually happens. Domestic commercial arbitration in Australia runs on the substantially uniform state and territory Commercial Arbitration Acts, while international arbitration seated in Australia runs on the federal International Arbitration Act 1974. This template names the applicable regime based on whether the arbitration is domestic or international, and requires a specific seat rather than leaving the process undefined.
Clause-by-clause guide
- Borrower status
- States whether the borrower is an individual/strata corporation on personal credit, or a company/business borrower, which determines whether the National Credit Code applies.
- Promise to pay
- States the principal amount, currency and interest rate.
- Security / PPSR registration
- States whether the loan is secured, and if so, flags PPSR registration.
- Guarantor
- An optional clause naming a guarantor and their liability, or stating plainly that none exists.
- Default
- Defines default and states the default interest rate.
- Dispute resolution
- Names the applicable arbitration regime (domestic or international) and a specific seat.
Australian compliance checklist
This covers general commercial lending; a regulated consumer credit contract carries further National Credit Code requirements.
Check whether an Australian credit licence is needed
A lender engaging in credit activity under a regulated National Credit Code contract generally needs an Australian credit licence; this typically applies where the borrower is an individual or strata corporation borrowing for personal purposes.
Register security on the PPSR
A security interest in business assets should generally be registered on the Personal Property Securities Register to protect the lender's priority against other creditors and purchasers.
PPSR — About the registerName a specific seat and regime for arbitration
Domestic arbitration runs under the relevant state or territory Commercial Arbitration Act; international arbitration seated in Australia runs under the federal International Arbitration Act 1974. Naming the applicable regime and a seat avoids an unenforceable, undefined arbitration promise.
How to complete the agreement
- Confirm the borrower's status. Establish whether the borrower is an individual/strata corporation on personal credit, or a company/business borrower.
- Enter the loan terms. Add the principal amount, currency, interest rate and payment schedule.
- Decide on security. State whether the loan is secured and register on the PPSR.
- Decide on a guarantor. Name a guarantor if one exists, or leave the clause off.
- Name the arbitration regime and seat. Choose the applicable Commercial Arbitration Act or the International Arbitration Act 1974, and a seat.
Frequently asked questions
Is there a maximum interest rate I can charge on a business loan?
There's no general statutory usury cap on commercial lending in Australia, unlike some US states. Specific caps apply to certain regulated consumer credit products, but not to ordinary business lending.
Does this loan need an Australian credit licence?
If the borrower is an individual or strata corporation borrowing predominantly for personal, domestic or household purposes, the loan may be a regulated National Credit Code contract requiring the lender to hold an Australian credit licence. An ordinary business loan to a company generally sits outside that regime.
How do I register security over business assets?
Register a Financing Statement on the Personal Property Securities Register (PPSR), the national register that replaced the old state-based charge registers and ASIC's Register of Company Charges.
Do I need a guarantor for a business loan?
Not necessarily. If a guarantor is required, name them specifically and state their liability, rather than using a clause that promises a guarantor mechanism and then disclaims it.
Which arbitration framework applies to a dispute under this loan?
If the arbitration is domestic, the relevant state or territory Commercial Arbitration Act applies. If it's international, arbitration seated in Australia runs under the federal International Arbitration Act 1974. Name the applicable regime and a specific seat rather than leaving the process undefined.
What's the difference between the PPSR and the old ASIC Register of Company Charges?
The PPSR is a single national register covering security interests in personal property generally — vehicles, equipment, receivables and more — administered by the Australian Financial Security Authority. It replaced the old state-based registers and ASIC's Register of Company Charges when the Personal Property Securities Act 2009 came into force.
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Disclaimer
This template and guide are for general information only. They are not legal or financial advice, and no lawyer or ASIC has reviewed or approved them. Credit licensing, PPSR registration and arbitration enforceability are fact-specific; confirm the requirements that apply to your agreement before relying on this document.
