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How to Find the Best Small Loans for Your Business

Are you looking to find the best small loans for your business? Here’s how to find the best business loan for your company’s needs!

Did you know new small business is created every 100 seconds in Australia? Many people dream of being their own boss and running their own business. Does this sound like you? If so, you’ll want to know some of the tips to get your business running quickly.

One of these tips is securing a business loan. Your business needs financing to afford your business expenses. There are many business loan options. But which is the best loan?

Here’s how to find the best small loans for your business.

 

The Benefits of Business Loans

There are many business financing options. Why should you take out a loan? Here are the benefits of business loans.

 

Avoid Conflicts

Many business financing options come with their challenges. Business loans are flexible and lenders will work with your business on repayment amounts and options. There are also many business loan options available.

Choosing business loans as your financing options will avoid many of the challenges and conflicts associated with business financing.

 

You Maintain Control

There are business financing options, such as borrowing money from investors, that limits the control you have of your business. With business loans, you gain capital and can still maintain full control of your business.

You not only maintain control of your business but also your profits. If you decide on a specific business loan option, such as a merchant cash advance, all the lender will do is take a percentage of your sales to pay back the loan.

 

Protect Yourself and Your Business

Funding your business with personal finances can cause many problems. For example, you put your liability and your finances at risk.

Business loans further separate your assets from your business assets. You not only protect your business, but you also protect yourself.

 

Different Types of Small Loans for Your Business

To find the best loan, you’ll have to know the two best loan options: unsecured small business loans and merchant cash advances. Here’s more information about both.

 

Unsecured Small Business Loan

An unsecured small business loan is a type of financing where businesses don’t put up collateral. Instead, the lender judges their qualification based on credit and financial worthiness.

Small business loans have the following features:

  • Short-term payment periods
  • Convenient repayment options, such as daily repayment
  • Minimum paperwork
  • No collateral required
  • Quick approval
  • Generous fund amount (between $5,000 and $30,000)

A small business loan is right for you if:

  • You want a straightforward business finance solution
  • You want to avoid steep repayment periods
  • You want to use the funds for a specific purpose

This type of loan is ideal for all business purchases. But unsecured small business loans are recommended for businesses that want to renovate or expand their business, improve their cash flow, hire more staff, purchase equipment, and purchase stock.

To qualify for an unsecured small business lending, you need these requirements:

  • An ACN/ABN
  • Operating for at least six months
  • Minimum $10,000/month in gross sales
  • Your current bank statements
  • Desired loan amount
  • Your planned repayment amount

If this sounds like what you’re looking for, you can apply for an unsecured small business loan with no application fee.

 

Merchant Cash Advance

A merchant cash advance is an alternative to traditional business financing. Instead of a fixed repayment amount, the lender takes a percentage of your terminal sales. This is recommended for businesses that face fluctuating cash flow.

The features of a merchant cash advance include:

  • Short-term financing
  • Variable daily repayments
  • Minimum paperwork
  • Unsecured cash advance
  • Quick approval
  • Can borrow between $5,000 and $300,000

A merchant cash advance is right for you if:

  • You can’t afford a hefty repayment plan
  • Your business receives most of its transactions via terminal sales and credit card sales
  • You’re looking for a straightforward business financing solution
  • Your sales fluctuate

A merchant cash advance is ideal for many different business purchases. But this option is recommended if you’re looking to:

  • Renovate or expand your business
  • Improve your cash flow
  • Hire new staff
  • Buy new equipment
  • Pay taxes
  • Buy stock
  • Pay superannuation

How to qualify for a merchant cash advance:

  • Have been operating for six months and have six months-worth of financial statements
  • Minimum $10,000/month in gross sales
  • Registered for GST
  • Have an ACN/ABN
  • Turnover at least $120k per year
  • Australian resident
  • At least 18 years old
  • Proof of business ownership

If this is the best business loan option for you, click here to apply. There’s no application fee.

 

Knowing the Best Loan for Your Business

Both of these loan options have guidelines to see if they’re the right choice for your business. But knowing the best loan for your business isn’t always easy.

When deciding between your loan options, know the answers to these questions:

  • How do you plan on using your loan?
  • How much financing you need
  • How much repayment you can afford

Both unsecured business loans and merchant cash advances give you immediate access to your funds if you’re approved.

If you’re still not sure which loan option you should choose, ask a lender before you fill out an application. They can look at your capital, and your business needs to help you select the best loan option.

 

How to Qualify for a Business Loan

Many small businesses apply for business loans and get rejected. Only $77 billion is lent to small Australian businesses every year. Why is that? There are many reasons, but one of the biggest reasons is no previous business financial history.

This doesn’t mean you can’t qualify for a loan, even if you have minimal financial history and no existing business credit. A lender will look at several different factors to see if you qualify.

These include:

  • How you will use the loan
  • The type of loan
  • Your financial projections
  • Monthly revenue
  • Your industry
  • Your collateral (if applicable)

It’s recommended you have this information ready when you apply for your business loan.

 

What to Do Before Applying for a Small Business Loan

Even if you meet all of the qualifications, lenders will still look for certain things before approving your business for a loan. Here’s what to do before applying for small business loans.

 

Check Your Credit Score

Your business’s creditworthiness will impact your loan approval. Check your business credit score. If you don’t have one, check your credit score. Many lenders also look at individual credit scores, especially if you’ve had your business less than a year.

The higher your credit score, the better chance you’ll be approved for a loan. You may even get a lower interest rate if your credit score is at least good.

 

How Much Funding You Need

Know how much funding you need before filling out an application. Pre-plan your expenses and find a lender who offers a loan for that much. You should also plan how much you can afford to pay back daily. This advice not only applies to large loans but also for small loans.

 

Ask Your Business Mentor for Advice

If you have a business mentor, you should ask them for business loan advice. They can look at your finances and the purpose of the loan and match you with a suitable lender. If you don’t have a mentor, ask a lender for advice before filling out an application.

 

Create a Business Funding Plan

While this isn’t necessary, it’s helpful to craft a plan when you receive the loan. This plan details how you will spend the loan and what you’ll do to pay it back. Fortunately, many lenders have a daily payment plan strategy where they take an amount or percentage and apply it toward your repayment.

 

How to Apply for a Loan

Now that you know the two best types of loans and the qualifications, you can apply for a loan.

First, find the best lender. Australia has many online lenders that work with small businesses. You’ll want to find a lender who’s passionate about small businesses and will work with your needs and your finances.

When you select the best lender, fill out an application. Most lenders offer an online form. You’ll also want to find additional perks, such as a free application.

The application will request essential information, such as your ABN/ACN and your financial statements. The form may ask you additional questions, including:

  • How long you’ve been in business
  • Your industry
  • Your month revenue
  • If you have any debt and how much
  • Your credit score
  • How you plan on using the loan

From here, the lender will inform you if you’re approved. The best lenders will send you the funds in as little as 24 hours.

 

How to Find the Best Small Loans for Your Business: Sign Up for Our Loans

Does your business need financing? Small loans are recommended, especially for small businesses. But how do you find the best loan? The secret is first finding the best lender. And you came to the right place!

We offer unsecured small business loans and merchant cash advances for Australian businesses. Fill out a business loan application.

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