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.
Getting a small business loan that’s right for your needs can be difficult. You want to get the most value, the best interest rate, and repayment term. Work with an experienced broker from Break Free Home Loans to compare the best small business loans from various Aussie lenders. We ensure a stress-free loan application process for successful loan approval.
What Are Loans For Small Business
Best Small Business Loans
- Why you need finance
- How fast you need access to capital
- How much capital you need
- Your business’ eligibility — state of finances, income level, length of operation, industry
- Total cost of debt you can afford
Once you’ve appraised these factors, you can find an affordable loan that suits the needs of your business.
Requirements For Getting A Small Business Loan In Melbourne
The eligibility criteria for borrowers vary from lender to lender. Generally, however, you need a year or more of business history and revenue to qualify for small business lending. Startups operating for less than a year should consider other financing options. The following are some things you’ll need when you prepare your loan application:
Business Entity Domiciled In Australia
- Business licences and registrations allowing you to conduct business
- Articles of incorporation
- Contracts with third parties such as clients or suppliers
- Trust deed
- Franchise agreements
- Leases for commercial real estate or business equipment
Assets Or Capital
Things To Consider When Choosing A Loan
Types Of Small Business Bank Loans
These are traditional business loans where you need to complete a large amount of paperwork and go through a long approval process. With a rigorous approval criteria and an asset security required as collateral, these loans offer more competitive interest rates, starting at 5%. However, for a small business to qualify for a secured loan, they need to have very good credit scores.
This is how small to medium businesses get the finance they need without having to go through a complicated lending process. Unsecured loans generally offer higher interest rates than secured loans because there is a bigger risk for the lender without collateral involved. They have a quick and straightforward approval process that appeals to business owners who need financing on short notice.
A business line of credit gives you access to flexible cash. You won’t need to make payments or get charged interest until you use the funds as needed. Lenders only charge interest on the amount you use and not the entire credit limit. Credit lines are best for managing cash flow, handling unexpected expenses and financing short-term business needs. You get to repay the loan at your own pace. However, business lines of credit start at $50,000 AUD minimum so it’s not suitable for those looking to borrow lower amounts. In Australia, the interest rates on credit lines can range anywhere from 5% to 12% per annum.
A form of asset based financing, equipment finance uses the asset you’re buying as collateral for the loan. It’s a specialised form of lending dedicated for purchasing machinery or equipment. You get to own the asset immediately with a loan amount up to 100% of the value of the equipment, plus soft costs. This includes your installation, delivery, warranties, assembly and other expenses to get your equipment up and running. With an equipment finance loan, you’ll make regular repayments over the term of the loan, usually three to five years. The interest rates can range from 6% to 15% for equipment loans.
There are also other finance options you can pay back over time with interest. Examples are business equity loans, invoice financing, personal loans and business credit cards.
Alternatives To Small Business Financing
A personal loan for business can be a good option if your business is young and you don’t qualify for traditional financing. Personal loan lenders review your personal credit score and income rather than your business history.
A business credit card gives you revolving credit and is a great option for short-term expenses. It’s usually easier to qualify for a business credit card than a small business loan. While credit limits are usually smaller than a line of credit, business credit cards may offer rewards such as cash back or travel points.
Do You Have Any Questions?
Frequently Asked Questions
What Are Requirements For A Small Business Loan?
How Much Deposit Do I Need For A Business In Melbourne?
What Are The Main Types Of Small Business Bank Loans?
- Term loans
- Secured loans
- Credit lines
- Equipment finance
Additional funding options from other lenders include:
- Unsecured loans
- Invoice financing
- Startup financing
- Sole trader loans
- Business credit cards
- Personal loans