How to Escape High-Interest Business Loans in 2025
Published: May 28, 2025
By Michael Pajar | Business Finance Broker | Casey Asset Finance | 0450 622 115 | michael@caseyassetfinance.com.au | Instagram: @casey_asset_finance
Estimated Read Time: 4 minutes
If you’re stuck in a high-interest loan, this post could change your business—and your life.
If You’re Drowning in Daily Repayments—You’re Not Alone
Thousands of business owners across Australia are silently struggling under the weight of high-interest business loans with daily repayments, extremely short terms, and no breathing room.
You took the loan to move forward—not to feel stuck. And the truth is, you’re not stuck.
This guide is here to help you understand what’s really going on, what your options are, and how you can break free from high-cost funding without making things worse.
1. How These High-Interest Loans Actually Work
Most of these loans use a factor rate instead of a traditional interest rate. That’s important, because it hides the true annual cost.
Example:
You borrow $100,000
The factor rate is 1.4
You repay $140,000, regardless of how early you pay it off
These loans often:
Require daily repayments
Last 3 to 6 months
Are unsecured, no-doc, or low-doc
May require a caveat on your property
Have effective annualised rates of 80%–120% or more
Compare that to a typical business loan often between 15%-30% pa
Or a capital raise against vehicles or equipment usually between 9%-20% pa
They’re designed for speed, not sustainability.
2. Signs You May Be in a Debt Trap
Are your repayments affecting wages, BAS, or suppliers?
Was your loan approved in hours, with little explanation?
Have you rolled over, topped up, or refinanced one high-cost loan with another?
Do you feel stressed about logging into your bank account?
If this feels familiar—don’t ignore it. Many businesses suffer in silence.
3. When These Loans Are Appropriate
There are very few lenders in the market in 2025—they include Bizcap, TruCap, SkyeCap, Capify, and BizFund (formerly AuzCap)—and they do have a place in the market.
They’re often the last resort for:
Startups with between 4-6 months trading history
Clients with active defaults or judgments
Tax debt with ATO garnishees
Time-critical cash flow emergencies
But for most businesses, they’re not the right fit—as a last choice yes, but they should never be the first choice.
4. What If a Broker Recommends This Loan?
Here’s what you need to ask immediately:
“Which other lenders did you try before recommending this?”
Because the truth is:
Many brokers skip over better options (longer terms, lower rates)
Some go straight to these lenders due to faster commissions
Some go to these lenders because they are inexperienced in this space
Most clients don’t know there are better alternatives
First-time borrowing?
If you’ve never taken out a non-bank business loan—do not start here.
There is almost always a cleaner, safer, lower-cost solution for first-time business finance customers.
And if your broker can’t explain why they’ve gone to a high-cost lender first—it might be time to get a second opinion.
That’s just straight-up bad practice.
5. Smarter, Safer Options That Could Help You Escape
Option 1: Refinance to a Longer-Term Loan
Terms between 12 to 60 months
Weekly, fortnightly, or monthly repayments
Annual percentage rate, not factor rate
More breathing room to grow (or survive)
Option 2: Use Equipment Finance
Refinance trucks, machinery, or equipment
Lower repayments due to asset security
You might even draw cash out of the asset
Option 3: Short-Term Bridge Loan (with Better Terms)
Still short-term, but less punishing
While you improve credit or wait on settlement
Structured exit strategy
Often no repayments for the first 6 months
Option 4: Loan Consolidation
Combine multiple daily repayment loans into one
Lower combined repayment
Easier to manage — and better for your mental load
6. The Ideal Client Story
A business owner has two high-cost loans totalling $80,000. Their repayments were daily, significantly high—and painful.
A good broker would:
Replace all loans with a single 1-5 year loan
Convert those daily repayments to weekly, fortnightly, or monthly
Reduced their cash outflow most oftentimes by 100% and more
The result for the business owner?
Cash flow recovered
Staff retained
Growth plans back on track
Peace and stability
Does this happen enough?
Unfortunately, no. We do wish for all business owners to make careful and informed decisions before taking the leap, and ensure they are supported by brokers who truly care about the business and their wellbeing.
Lastly, please remember that it only takes 2 financial dishonours to be auto-declined by 90% of the lender’s in the market, and the only way to claw your way out is through a well-presented application, with a clear exit strategy.
7. What to Do Right Now
Step 1: Don’t panic
You’re not the first, and you won’t be the last.
Step 2: Get your documents ready
We’ll just need:
Details of your cap loan
6 months bank statements
Your driver’s licence
Step 3: Talk to someone who actually listens
At Casey Asset Finance, we don’t push lenders—we take the time to understand your full profile and workshop the right solution for your needs, not just the fastest option.
Behind the scenes, we also work closely with our relationship managers to explore all viable options before any formal application is submitted.
This approach ensures that you stay in control, make fully informed decisions, and most importantly—your credit score remains protected every step of the way.
8. Our Commitment as Your Broker
We always go to mainstream and low-rate lenders first
We only consider high-interest lenders if every single other door is absolutely closed
We tell you why, every step of the way
We don’t treat you like a “deal” — we treat you like a business owner
We are a boutique family-run finance brokerage and specialist in business finance
9. What’s Next?
You deserve:
A second opinion
A clear plan to exit debt
A broker who actually gives a damn
A broker to support your next growth phase
Let’s workshop your options with zero pressure and complete transparency.
Ready to explore your options?
Call Michael on 0450 622 115 or submit a simple form here.
No sales pitch. Just clear, straightforward advice.
