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Small business loan
Small business Loan

Small Business Loan

  • Why small businesses need loans
  • How to get a small business loan without collateral
  • The small business loan process
  • Is a small business loan hard to get?
  • Small business loan pros and cons
  • Small business loan qualifications
  • Small business loan vs personal loan
  • Can you get a small business loan with bad credit?
Small Loan Business

More and more Australian business owners across several industries are resorting to small business loans as a means to finance various aspects of their business. And with the convenience and versatility that comes with it, it’s not hard to see why.  

Small business loans fall under the debt financing category and are usually used by small businesses and startups as a means to fund business operations. Small business loans differ tremendously from traditional bank loans in terms of loan requirements, credit score requirements and even repayment options.

In its most basic form, small business loans work very much like mortgages and/or auto loan systems although it also has similarities with revolving credit systems. Its terms and conditions may also vary depending on the purpose of each small business loan.

Here’s what every business owner should know about small business loans:


Why small businesses need loans

Small businesses will sometimes need to take out loans especially during the first few stages of the business as a way to meet daily business needs without having to worry about making a dent in the business’ overall working capital and profit.

Small business loans are a good way for startup businesses to gain their footing in their respective industries and establish themselves until such time that they are able to navigate the industry on their own without having to worry about depleting capital and resources.


How to get a small business loan without collateral

One common misconception when it comes to small business loans is that these kinds of loans require some sort of collateral before it can be approved. Luckily, a lot of nonbank and alternative lenders can be very forgiving and doesn’t necessarily require loan collaterals for businesses.


The small business loan process

Knowing how to get a small business loan from a bank and from alternative lenders is a must for business owners who want to take out small business loans. The process itself is highly similar to bank loan processes, although business owners should take this with a grain of salt and still take all of the necessary steps needed to determine what kind of small business loan would best suit their business.

Luckily, the process for getting a small business loan from alternative lenders is relatively easier compared to getting bank loans, and business owners can secure a business loan regardless of their credit score and business type.

Click here for more information regarding the small business loan process.


Is a small business loan hard to get?

Exactly how hard is it to get a startup business loan? Alternative lenders and even other business owners will probably say that while there are a lot of requirements before a small business loan can get approved, securing a small business loan from alternative lenders is relatively easier compared to getting a loan from bank lenders.

Aside from having an easier loan process, small business loans are further subdivided into other loan types, with each loan type catering to a specific business need. Business owners must be able to choose the right kind of loan for their business so they can maximise its benefits.

We’ve made choosing the right small business loan easier for business owners. Click here to know more about various business loan types.


Small business loan pros and cons

Part of deciding whether to get a business loan and what kind of business loan to get is getting acquainted with the pros and cons of small business loans. While its advantages certainly outweigh its pitfalls, it is still important to know what these disadvantages are and what they could mean for the business in the future.

Small business loans definitely have higher approval rates than bank loans and have less stringent requirements. However, issues such as risking personal property, lack of equity and restrictions which may apply throughout the duration of the loan repayment could have an impact on the business especially once the business owner decides to take out a small business loan.


Small business loans qualifications

Business owners will have to keep in mind that the qualifications for small business loans will most likely involve a lot of legal and financial documentation, which have to be prepared ahead of time in order to prevent any mishaps and help speed up the loan application process and claims.

Requirements may vary depending on the type of loan and type of lender, but this will most likely include documents such as bank statements, business licenses, financial projection documents, income statements and even product prototype design plans. These supporting documents are needed by the business to prove the stability of the business and its capability of paying back the business loan on time. Failing to present these documents may lessen the chances of the business getting an approval.

Click here for more information regarding the requirements needed for business loan applications.


Can you get a small business loan with bad credit?

Can you qualify for a small business loan with bad credit? Traditional bank lenders will usually accept nothing less than a perfect credit score when it comes to approving business loans, which makes it pretty understandable that a lot of small business owners think that the same guidelines strictly apply to alternative and non-bank lenders. This is just one of the many misconceptions that surround small business loans.  

As far as credit scores are concerned, it’s relatively easier to get an approval from an alternative lender as compared to getting an approval from traditional bank lenders. This is because unlike bank lenders who prefer nothing less than a perfect credit score, alternative lenders don’t mind overlooking credit scores, provided that the business is able to provide proof of stability as well as its capability to repay the loans within the set period.

We’ve made it easier for you to navigate the varying myths and misconceptions surrounding small business loans and the truth behind them. Click here to know more.


Small business loan vs personal loan

Business owners usually ask if is it easier to get a business loan or a personal loan. While personal loans technically have higher approval rates compared to business loans from bank lenders, small business loans from alternative lenders are less stringent than bank lenders, making its approval rates at par if not higher than those of personal loans.

Securing a small business loan from alternative lenders are so much easier, and it all boils down to choosing the right kind of loan that will fit the business’ needs. Business owners can also explore options such as unsecured business loans, which offer more flexibility in terms of repayment options as compared to secured business loans.

With the wide selection of small business loans available in the market, it’s easy to get lost in the sheer variety of benefits that each loan offers. But choosing the right kind of business loan for your business doesn’t have to be hard. Click here to learn more about picking the right business loans for small businesses.