As a small business owner, sometimes it’s easy to get caught up in the excitement of your ideas coming to life, or promoting and growing your brand, that you forget about the financial aspect of it all and find yourself with all these plans, and no money to execute them!
However there are plenty of options available that will allow your business to loan a tidy sum to pay off your debts or to pull off your promotional ideas. But before you go and apply for money from the first place that offers it, it’s important to do a little background research first. Lucky for you, we’ve done the hard yards and researched what is available to help you get started!
Secured or unsecured?
First, you’ll need to decide what kind of loan is right for you and your business. Here there are two options – Secured or Unsecured Loan:
Secured Business Loan
This is finance offered in the form of collateral (a form of security, usually over property) and is offered by banks, financial institutions and occasionally credit unions. Because you have offered up collateral, there are usually lower interest rates and longer terms, however this will depend on the lender. Collateral can include property such as real estate, vehicles or equipment, unpaid debtor invoices from your business and inventory. In the event you cannot pay off your loan by the terms set out, the bank or financial institution can seize these assets to pay off your debt.
Unsecured business loan
An unsecured business loan doesn’t require collateral and often have less stringent requirements. However, there will be specific qualifications required depending on the lender. This can include your annual turnover and credit scores. In this case, if you do not stick to the agreed terms for repayment or fall behind, the lender may add fees or increase the interest rate. If the lender considers the debt to be in default, it is usually turned over to a collection agency.
Business Loan Lenders
Here’s a few examples of some of the small business loan lenders currently available;
Prospa
- Loans from 5k – 250k
- Apply online in 10 minutes
- Funding possible within 24 hours
- Daily or weekly repayments direct debited from your account
MYOB
- Loans from 10k – 250k
- Apply online
- 6 – 24 month terms
- Daily or weekly direct debited from your account
Check it out here >
Moula
- Loans from 5k – 250k
- 6 – 24 month terms
- Links to online banking or accounting software
- No application or establishment fees
- No direct debit fees or early repayment fees
Moula requires that your business:
- Has an active ABN or ACN
- Been in business for at least 6 months
- Has at least $5,000 in monthly sales
Check it out here >
Lumi
- Loans from 5k – 100k
- Weekly repayments
- 3 – 12 month terms
- 2.5% establishment fee
Lumi requires that your business:
- Has an active ABN or ACN
- Been in business for at least 6 months
- As a gross annual turnover of at least $50,000
These are just some examples of the options out there, but remember: before you apply for a loan, make sure you get professional advice and shop around a bit to make sure your getting the loan that’s best for you and your business. It’s also really useful to have some form of online accounting system beforehand, as they can produce all the reports needed to apply with just a few clicks!
