Small Business Loans

To qualify for a small business loan, typically the business needs to have been trading for at least six months, have a monthly turnover of at least $5,000 and be able to service the loan repayments.

In most cases, the entire process from loan application to decision takes less than an hour. Small business loan approvals can be approved fast due to the technology used by fintech lenders. For example, electronic bank statement transaction history can be analysed in seconds and credit engines are used to automate most of the decision metrics.

To a bank, whether you are borrowing $30,000 to do a renovation or wanting to borrow $2,000,000 to acquire a competitor makes no difference to them. For this reason, banks aren’t always overly excited to facilitate this loan for you. Where as a fintech lender is geared up for exactly this, small business loans. Most fintech lenders allow technology to decipher your business’s financial health and make a lending decision fast. If you do manage to jump through all the hoops the banks put you through, you will most likely be offered a much lower interest rate than a fintech lender with less fees. However, if you are like the overwhelming majority and need fast access to cash, the fees and higher interest rates can seem insignificant.

An unsecured business loan is a type of business loan that does not require the business owners to provide security as collateral. This means you do not have to offer your assets such as property, vehicles and equipment as security to the lender. If you default on the loan, the lender can't automatically take your property or other assets.

With an unsecured business loan you will pay higher interest rates than that from a bank. Again, it’s a risk rated product meaning that a business that hasn’t been trading long, with inconsistent revenue - will pay more than a business loan applicant who has been operating for 5+ years with consistent revenue.

No, regardless of whether you live in WA, SA, NSW, VIC, TAS, QLD or even NT, you will be assessed the same way, but do note if you live in a tourist “hot spot” your business may have seasonal income which will be assessed differently.

Yes, most lenders will allow you to pay out your loan early, HOWEVER, you need to check the fine print. Some lenders will charge you for the privilege and sometimes this will outweigh paying the loan out early. If you feel you might be in a position to pay the loan out early, or at least want the flexibility to do so without penalty, you need to choose a lender with this as an option.

Yes, most lenders will allow you to pay out your loan early, HOWEVER, you need to check the fine print. Some lenders will charge you for the privilege and sometimes this will outweigh paying the loan out early. If you feel you might be in a position to pay the loan out early, or at least want the flexibility to do so without penalty, you need to choose a lender with this as an option.

You’re asking to borrow tens of thousands of dollars to your business. A lender needs to feel comfortable to lend their money to you. To get that level of comfort, the lender needs access to your bank statements as this gives a true picture of your business. It essentially allows the lender to reverse engineer your real, “right now” Profit and Loss (P&L) statement. Balance sheets, P&L Statements out of your accounting systems can all be altered and may not be up-to-date. Bank statements do not lie. Read more here.

Buying an existing business can be an exciting opportunity to grow your business and open doors to new customers. If you’ve done your due diligence, have a solid strategy and you’re confident that the acquisition will be beneficial for your business then you can apply for a business loan. Make sure you have factored in all the costs and have estimated your new revenue. Lenders will still take into account how long you’ve been business, your current revenue and expenses and the industry.

It depends on several factors, including:

• How long you have been trading. Most lenders like to see that you have been trading at least 6 months.
• Your industry: Lenders will lend to most industries, but some are more favourable than others.
• Your financials: As mentioned, lenders will want to see your bank statements to make a decision. They want to assure that you can afford to service a loan.
• Your credit score: Does your credit history and score reflect that you’re responsible?

Its best to speak with a business loans broker if you have more eligibility questions as a broker will have access to many different types of lenders.

And YES! You can get a business loan if you are a sole trader or self employed.

The first question to ask is why are they selling? You don’t want to be throwing good money after bad. A business may be for sale because it’s not making enough money or barely breaking even. We’re not saying you can’t turn it around, it may well be the case of poor management. Sometimes there’s a genuine reason for selling such as retirement, moving, health and/or family reasons. Just ensure you conduct proper due diligence. Carry out competitor research, inspect the financials, products/services and premises. Learn who the customer is are and understand the market.

No, the application process is quick and simple with fintech lenders. They just want to ensure you can service a loan without hurting your business - responsible lending. If you’ve been trading for six months and you're making a profit it should be a simple process to get a business loan. It costs nothing to find out, and as the old saying goes, money makes money - so the quicker you can get access to funds the quicker you can make more money.

Business expansion is usually a good sign of business growth and you shouldn’t be held back when growing. Funding business growth should be part of your business plan and strategy. After all, isn’t that why you’re in business instead of working for someone else? To build it, grow it and make it a successful business. When applying for a loan to expand your business the lender will look at your financials, industry and how long you have been in business and talk to you about your intentions to get a better understanding of how they can help.

No, in Australia you do not require any deposit to get a term loan for your business. You may only be required to have a deposit if you were buying a piece of equipment, or if you were wanting to buy an existing business.