Our brokers work hard at understanding our client’s unique circumstances and helping them overcome common home loan challenges. Whether you’re a first home buyer or an experienced investor, we’ll help you find the best home loan for your situation. Whether you’re self-employed and have trouble proving your income or you’re a contractor or casual worker, we offer solutions for all types of clients’ income sources.
Are you searching for a secured business loan for your business? Break Free Home Loans works with a wide range of secured business loans Melbourne lenders. When you need a finance option that is affordable and time-sensitive, we can help you find a secured loan with a suitable repayment term and interest rate for your needs.
What Is A Secured Business Loan
How Does It Work
Small business loans refer to loans provided to a business that is secured by property or assets. The loan can be used by the business to purchase machinery, new premises and just about anything it needs to expand or manage cash flow problems.
What Can Be Used As Business Collateral
What Can A Secured Business Loan Be Used For?
A secured business loan can be used for any number of purposes including:
- Finance business expansions: rather than use internal funds and disrupt your working capital, financing business expansions are typically best done with external funds. Getting a loan will get you a reliable source of finance which costs you can spread out over a suitable repayment term. If you have a reliable cash flow that is steady enough to take on loan obligations on top of your existing payments, it can be a great choice to offset the exorbitant costs associated with an expansion.
- Pay for cash flow shortages: if your business is undergoing revenue or cash flow problems, a short term business loan can help you get the support you need until you get back on your feet. It may be essential for some businesses to obtain this immediate form of financing to remain in business. Some businesses with seasonal income may also find this type of financing useful.
- Fund hiring and staff commitments: as a business grows, it will have to hire new staff and make up for training costs, profitability gaps, recruiting expenses and finance other staff related commitments.
- Finance working capital: you may need to purchase vehicle assets, fund marketing costs and other working capital expenses for your day-to-day operations.
- Purchase inventory: if you’ve been in business for a while, chances are you know which products are most profitable and when. Perhaps, you want to seize a golden opportunity to make extra profits during high sale periods and don’t have the cash on hand to obtain more inventory. A loan can help you increase your stock and secure the profits you want immediately.
- Buying property and real estate: whether it’s a new warehouse, working space or retail premises, buying a commercial property or other types of real estate is one of the most conventional reasons a business chooses to take out a loan.
- Purchase machinery and equipment assets: machinery and other equipment are integral to your production. Financing these costs can be a heavy burden for emerging businesses, or those without much working capital to spare beyond their day-to-day operations. A loan can help you finance the purchase price, delivery, installation, assembly and other costs needed to get the machinery up and running.
What Are The Benefits Of Secured Finance?
Lower Interest Rates
Longer Loan Terms
Easy To Get
Secured vs Unsecured Business Loans
Secured business loans tend to offer more flexible, longer loan terms than unsecured business loans. With an asset as collateral, lenders view secured loans as lower risk and thus will offer lower interest rates to commercial borrowers. Because of the guarantee provided, they also will be more lenient with your credit profile. With unsecured loans, lenders will rely exclusively on your credit history and will demand a stricter borrowing criteria to qualify. By providing security, a business should also receive a higher loan amount than they would if they chose an unsecured loan. This is often necessary if you need to finance major purchases and smaller loan amounts aren’t adequate.
Things To Know About Financing For New Business
Lenders will check your eligibility for their loan based on the asset you offer and your business’ credit history. Your asset needs to provide substantial value so that if you happen to default on your loan, the lender has something to fall back on to make up for the costs. You can use property, working capital and other tangible assets as collateral. When you put up an asset as loan security, you will qualify for better interest rates, loan periods and repayment terms.
Lenders will look into your business history to determine your creditworthiness. They typically need you to have been in operation for two years. You will often be asked to provide proof of your income through profit and loss statements, cash flow statements and other documents. They will also ask to see your most recent tax returns to see if your business has been fiscally responsible.
You need to provide your balance sheet and other financial statements. This way, lenders can verify your assets and liabilities, and determine if you are financially secure enough to afford their loan.