Common Reasons for Taking Out a Business Loan
Not sure which business loan is best for you? Here’s a list of the most common business loan purposes, from working capital to paying for a renovation.
Business loans come in many forms today, from unsecured business loans that provide fast, short term funding to take advantage of an opportunity, to a short term business loan to cover a shortfall.
There are more small business finance options to consider than the standard business loans the banks offer. Business loans can be used for any genuine business purpose too, there aren’t any restrictions.
Matching your loan to your business need
Business loans come in many forms today, from unsecured business loans that provide fast, short term funding to take advantage of an opportunity, to a short term business loan to cover a shortfall.
There are more small business finance options to consider than the standard business loans the banks offer. Business loans can be used for any genuine business purpose too, there aren’t any restrictions.
Working CapitalWorking Capital
Working capital is used to finance everyday business operations. Working capital finance is not used to buy expensive assets or equipment, but is generally used to finance the day-to-day operations of a business and ensure it can continue running smoothly.
Business finance options for working capital:
- Unsecured business loan
- Merchant cash advance
- Line of credit
- Business overdraft
- Invoice finance
- Business credit card
InventoryInventory
You can use an inventory loan to buy stock, or for any other business purpose. It enables you to leverage your inventory to give you access to extra working capital. And because it’s lower risk than unsecured business loans, it can be easier to access than other forms of business finance.
Business finance options for inventory:
- Unsecured business loan
- Line of credit
- Business overdraft
- Invoice finance
- Business credit card
EquipmentEquipment
Equipment finance is a form of funding equipment you need for your business. You may need to purchase more plant and machinery to increase your capacity, or to keep up with your competitors as technology advances and best practice evolves.
Perhaps you need help setting up your commercial kitchen and dining area will be a substantial investment, and equipment finance can help you spread the cost, freeing up your working capital for variable costs such as ingredients, breakables and wages.
There are countless situations where a business may need to access equipment, and there are just as many options to consider.
Business finance options for equipment:
- Equipment finance
- Chattel mortgage
- Business car finance
- Hire Purchase
- Operating Lease
- Finance Lease
- Asset finance
- Unsecured business loan
- Line of credit
- Business overdraft
RenovationRenovation
As the owner of a retail business, your main upfront cost is likely to be your store fit-out. First impressions are crucial, but custom shelving, premium fittings and interior decoration can be a substantial investment. You may also wish to renovate the building itself, either to improve your existing operation, or to fix up a new building for business expansion.
Business finance options for renovation:
- Fit-out finance
- Unsecured business loan
- Line of credit
- Business overdraft
- Invoice finance
- Business bridging finance
Unexpected expensesUnexpected expenses
Unexpected business expenses can cause a business to come grinding to a halt. Fortunately, there are many business finance options available to cover these costs - flexible credit facilities and fast-approval loans which can be accessed when needed.
Business finance options for unexpected expenses:
- Unsecured business loan
- Line of credit
- Business overdraft
- Invoice finance
- Merchant cash advance
- Business credit card
Hiring staffHiring staff
Hiring staff is an essential part of expanding most business operations. However, it can be incredibly costly to finance the training, onboarding, and required equipment for new employees. If you have a strong business case which shows how hiring new staff will increase profits, there will be a number of finance options available.
Business finance options for hiring staff:
- Unsecured business loan
- Line of credit
- Business overdraft
- Invoice finance
- Merchant cash advance
TaxTax
Business tax payments can be a major shock for first-time business owners and veteran business owners alike. Tax is also an inevitable, unavoidable aspect of running a business in Australia, so securing finance to cover these payments should be your top priority. Fortunately, there are plenty of short-term, fast-approval finance options to cover tax payments.
Business finance options for tax:
- Unsecured business loan
- Line of credit
- Business overdraft
- Invoice finance
- Merchant cash advance
ExpansionExpansion
Expanding your business can be a major step toward success - and a risk to your existing business operations. One of the most popular forms of expansion finance is called bridging finance, a type of loan which allows a business to continue its existing operation while financing the preparation of the new shop, office, or warehouse.
Business finance options for expansion:
- Unsecured business loan
- Line of credit
- Business overdraft
- Invoice finance
- Business bridging finance
Starting a new businessStarting a new business
You’ve got a brilliant idea for a business and you’ve decided it’s time to take the plunge. But no matter how simple your model is, getting a business off the ground is going to take cold hard cash and getting a startup business loan seems like the only way.
Raising cash is not uncommon, with approximately 46% of startups trying to raise funds at launch, and 72% requiring additional funding later on. While your loan options may be limited, you can still find a number of lenders who will approve loans for starting a new business.
Business finance options for starting a new business:
- Unsecured business loan
- Line of credit
- Business bridging finance
Purchase an existing businessPurchase an existing business
Dreaming of owning your own business, but don’t want to go through all the pain and risk of getting a business up and running from scratch? There’s a way around all of that hassle: buy an existing business. If the business is doing well and making profits, you might be able to leverage its assets or cash flows to help you get the finance you need.
There are many different ways to raise funds to buy your business and you may have to explore a few of them before you raise the funds you need.
Business finance options for purchase an existing business:
- Unsecured business loan
- Line of credit
- Business bridging finance
OtherOther
Your business finance need doesn’t fit into any of the major categories? Not a problem! Many business loans and finance options in Australia can be used for any legitimate business purpose. If you’re looking to cover miscellaneous costs, such as business travel, marketing and advertising, or any other type of business costs, you can use flexible business finance options.
Business finance options for other expenses:
- Unsecured business loan
- Line of credit
- Business overdraft
- Invoice finance
- Merchant cash advance
- Business bridging finance