As a small business owner, borrowing money from traditional
banks may be difficult. After all, unexpected expenses and bad credit might
hinder your ability to get a loan approved.
That's where alternative loan options, like online lenders
and similar companies, can help with your cash flow by providing funds for your
Here's everything you need to know about applying for business loans for a small business
What is a Small Business Loan?
A small business loan is one of the many cash-flow solutions
available, allowing you to access working capital and keep your establishment
at the top of its game.
Compared to applying for traditional loans, small business
loans from alternative lenders often have fewer requirements and don't usually
need collateral, making them preferable for small-scale entrepreneurs.
They're also likely to give chances to businesses that don't
have the best credit standing as long as they can repay the loan diligently.
These can be used for almost anything your establishment needs to stay on top of the industry, especially with how fast businesses move and innovate.
Benefits of Small Business Loans
There are many reasons why people prefer alternative business
loans for a small business.
They provide an avenue for almost anyone to access the money
they need to keep their company going.
Compared to traditional loans, alternatives are more
accessible and can come with additional benefits.
Check out how the schemes of these business lenders can help your establishment's financial situation and improve its standing in your industry.
Better Business Cash Flow
A business overdraft generally gives you additional funds to
keep your cash flow stable and moving, which is essential for any
It can help keep everything running smoothly, especially during low-income periods.
Get Funded to Develop Your Small Business
Your loan can fund upgrades for your tools, equipment, and
inventory to push innovations forward and keep pace with competitors in the
It can even help cover your operating costs, including
utilities, staff, and other bills.
The best part is you won't have to wait for days to get the financing you need for any project you're working with.
Flexible Repayment Options
Most small business loans are tailored to fit your credit
history and how well your establishment can repay the loan. However, these
alternatives can release your money in a business day.
While there is a lending criterion for each lender, you can
NEGOTIATE with them regarding your interest rates and monthly fees.
They can accommodate a variable interest rate or accept
payments before the fixed rate period.
Most are also transparent regarding the annual percentage
rate and other fees involved. You won't be surprised by hidden fees when you
apply for these loans.
Whether you choose a business line of credit or an unsecured business loan, you'll likely get a loan term that fits your needs.
How to Apply for a Small Business Loan
One of the best parts of small business loans is how you can
complete the loan application process online.
Get the funding for your commercial property without leaving
your seat in the office or at home.
This step-by-step guide will show you how easy applying for a small business loan is:
Step 1. Submit Your Application Online
Visit your lender's website and submit an application form.
They can vary across different lenders but generally ask for details regarding
your company or project.
You'll also provide the following information to have your
- Driver's License
- Bank account details (for online banking)
Lenders can request additional documents depending on their terms and conditions.
Step 2. Wait For Approval
Once they have your business plan and necessary documents,
the lender will review your loan application; it should take less than a
You will receive a notice once they can offer a specific loan amount and fixed interest rate for your case.
Step 3. Secure Your Funds
Once you've signed your contract and the loan is released,
the cash should be transferred to your provided bank account.
Just be sure to follow your repayment schedule and settle
them on time.
Any misses on monthly repayments can quickly rack up penalties and fees and affect your credit score in the long run.
Examples of Small Business Loans in Australia
It was not easy to access business financing options for
small-scale entrepreneurs before. But today, many alternative lenders in
Australia provide lending solutions to small businesses.
A traditional business loan offer is usually given by banks
to larger companies, which makes alternative lending more appealing to smaller
These lenders can provide the following loans to small
businesses in Australia:
- Unsecured business loans
- Business lines of credit
- Secured business loans
- Long-term business loan
- Invoice financing
- Equipment financing
- Short-term loans
- Merchant cash advances
While there may be more types, these are the MOST COMMON in
the Australian market. Whether you're handling established businesses or a
start-up, there's always an option for you.
NOTE: A secured business loan has different requirements from an unsecured business loan.
You may have more questions about business loans for a small
We've gathered the most common questions to help you with your research.
What Are the Requirements for Business Loans for Small Business in Australia?
The typical unsecured business loans for small businesses require the applicant to be AT LEAST 18 years of age with a
business based in Australia.
Besides the previously mentioned requirements, lenders would
also look into the following:
- Clean credit report
- Minimum of 2 years' experience in the same or similar
- A good financial history with little to no overdue
- All payments (e.g. taxes, payrolls, etc.) are updated
Requirements can also vary depending on the lending criteria and their terms and conditions.
Are There Any Risks for Business Loans for a Small Business?
Much like any business lending, business loans for a small
business also come with risks.
Since most ways to borrow money are unsecured, they tend to
have a higher interest rate than a traditional loan.
If you miss any payments, you can damage your credit score and
affect future loan applications.
Try to weigh the pros and cons BEFORE taking out a small business loan to prevent damage to your credit history.
Many financing options are available to help your business
grow and secure its place in the industry.
If you're looking into your options, getting professional
advice for the best financial solution (whether a small business loan, line of
credit, etc.) for your needs is best.