Unsecured Business Loans In Melbourne

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Break Free Home Loans are the best mortgage broker in Melbourne, with over 20 years of industry experience. We provide lending solutions and advice tailored to your needs. We work closely with clients as trusted advisors and are accessible to clients when needed.

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.

Does your company need to secure business loans without security as collateral? Unsecured business loans can be a good option for you. When you need to obtain fast, short term funding to take advantage of an opportunity or make up for revenue shortages, an unsecured business loan lets you spread out your costs over your loan period rather than having to pay for things outright. To borrow from the best business loans unsecured finance lenders, work with brokers from Break Free Home Loans. We can help you compare loans from different lenders to find the one that suits your business needs best.

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What Are Unsecured Loans For Business

Banks and traditional financial institutions offer secured loans, but this may not be the best option for your company. You can look into online lenders and private lenders who offer a wide range of unsecured loans for business entities. From unsecured small business loans to larger unsecured business funding, you can consider various options to better match your needs.

How Do They Work

Applications for unsecured business loans are typically fast and simple, and can even be done entirely online. Unsecured business finance allows you to get the funds you need without putting up security such as property or other fixed assets. They are often preferred because smaller businesses can have finance available without meeting banks’ rigorous lending criteria. When you receive finance, you will have to pay monthly loan repayments with interest over a set loan period. You can use the loan for any purpose, including:

Boosting working capital
Investing in inventory, equipment, property and other assets
Renovations and expansions
Hiring new staff
Seizing new business opportunities
Covering cash flow fluctuations
Any expenses related to your business activity

How To Apply For Unsecured Business Loans In Melbourne

Consider your ability to secure a loan, speed to access funds, and the fees and interest you will pay. You need to match the type and term of finance to your business needs when you choose a loan. The following is a step-by-step guide for your loan application:

Choose The Right Lender

Choose the right lender by comparing interest rates, fees and repayment terms, and other loan features. Seeking assistance from a broker can help you compare different loan products to find the best APR. We can help you check for eligibility and even prequalify for your loan. For the lowest interest rate and flexible repayment terms, submit your application with our brokers today.

Prepare The Documentation

For lenders to approve your loan application, you need to provide supporting documentation. This way, they can verify your creditworthiness and determine if you’re eligible for their loan. You will be asked to submit documents such as financial statements, bank statements, cash flow statements, tax returns, detailed business plans and other relevant proof. You need to assure lenders you are a viable, financially secure client. You have to supply your ABN, and other trustee agreements or a personal guarantee form in some cases. You also need to state any outstanding debt your business has.

Receive Finance

Once you’ve received finance, you can use the funds for any number of purchases. By buying machinery, securing new assets, retail premises or other opportunities, you will have the instant cash you need to invest in your business. Remember to stay on top of your loan obligations and be on time with your loan repayments. Make sure you can afford your payments on top of your income and expenses. You will need to budget your regular repayments over the life of the loan.

How Much You Can Borrow

Generally, you can qualify to borrow up to $500,000 AUD. The amount varies between lenders. What industry you’re from and why you need the loan will determine your eligibility. Lenders will assess your credit profile and offer you a loan amount based on your ability to repay the loan. To decide how much you can borrow, they will look at your financial performance as a business, your projected revenue streams and your liquidity.

You will often be asked to provide detailed business plans and confirm what you will use the funding for. It’s important to remember when you are applying for financing, you are taking on debt. You need to budget your loan and figure out how much you can afford to repay. Don’t overcommit your business, otherwise, you’ll risk major problems in the long run.

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What You Should Know About Unsecured Business Finance?

When you compare unsecured business loans Melbourne lenders, you need to consider the following factors:

Rates

You can find competitive unsecured business loan interest rates with the help of a broker. You will have to decide between fixed or floating or variable interest rates. Fixed interest rates allow you more manageable repayments because your monthly amounts will stay the same over the life of the loan.

Variable rates, on the other hand, will change according to the market’s interest rates. They can give you some of the lowest rates available, but are privy to fluctuations and will incur higher risk. Oftentimes, variable rate loans have more loan features but you should determine if they actually provide you the value you need. Fixed interest rates will allow you to hedge against future interest rises.

Deposit

Most of the time, term loans don’t require a deposit. However, some forms of unsecured finance may demand a deposit or initial down payment. Equipment finance, for instance, will only incur a small or no deposit. With little to no upfront payments, you can minimise the initial impact on working capital. Meanwhile, a hire purchase will require a more substantial down payment and will affect your working capital. It’s important to work with brokers who can match you with the type of loan you need so you can account for this requirement.

Fees

This includes any ongoing fees, administration fees, penalty fees or upfront establishment fees. You should pay attention to your overall fee structure because these charges will significantly affect your monthly repayments and the total cost of your loan.

Repayments

Your unsecured business loan rates, any ongoing fees and monthly amounts will decide your repayments. You need to be sure you can budget your loan obligation on top of your existing payments and debts.

Alternatives To Unsecured Business Funding

Whether it’s a credit issue, borrowing amounts, interest rates, or simply the speed of access to funds, your needs may vary. Rest assured, if unsecured business funding isn’t the one for you, there are other alternatives for finance available. This includes:

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Secured Loans

Because unsecured business loans rely heavily on your business performance and credit score, you may find them more restrictive. On the other hand, secured loans can offer you lower interest rates, more flexible repayment terms and higher borrowing amounts. Of course, you will have to put up an asset as security. If you have collateral to offer and are willing to part with your asset in the event of nonpayment, this can be a good option for you.

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Line Of Credit

A line of credit offers a revolving credit available to you anytime you need it. You can access the funds to borrow as needed and you only need to pay interest on the amount you use, not the entire credit limit. They are extremely flexible as you can draw on and repay the funds as you need them. However, they tend to come with high fees and interest rates.

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Business Credit Card

A business credit card offers convenience. They’re very easy to make purchases with and are a flexible source of emergency cash flow. They’re best used to purchase consumables and smooth out cash flow problems. Some cards offer interest-free periods, making them a cost-effective short-term purchasing tool. However, once this offer expires, the interest rates that kick in can be very high. If you can’t repay your balance before the introductory period ends, they may not be the best choice. They may also involve considerable fees and charges.

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Traditional Business Loan

Traditional business loans or term loans are longer-fixed term secured borrowing facilities similar to mortgages. In most cases, you need to use personal assets to secure the loan. They are usually available from big banks. You may be offered fixed, variable or split-rate options. Your loan term is usually linked to the life of the asset and you can negotiate a repayment schedule to suit your business cash flow.

However, most loans have minimum borrowing amounts and may not be suitable for applicants looking to borrow smaller amounts. There is also a lengthy and rigorous application and approval process that may take months. Generally, these loans are only available to established businesses and 75% of SMEs who apply for them get rejected.

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Invoice Finance

Invoice finance happens when you sell your outstanding invoices to a lender so you can receive cash immediately. The lender will forward you up to 80% of the invoiced amount, collecting 2-5% of the overall value of the invoice for themselves. Once the invoice is paid out by customers, you can receive the remainder of its value. The main benefit of invoice finance is it allows you to get your sales in cash sooner than usual, removing the risk of late or nonpayment of invoices. They’re suitable for covering short term finance issues, buying machinery or paying tax debt.

However, you will receive less than the overall value of the invoice. Overall, their cost is also more expensive than loan finance on an annual rate. Invoice finance lenders also have minimum turnover requirements. Therefore, it may not be available to new businesses without good sales history.

Do You Have Any Questions?

Submit your loan application with experienced brokers from Break Free Melbourne Home Loans. We work with a wide network of unsecured business loan lenders. We can help you complete your paperwork, submit an application and negotiate with lenders on your behalf. If you want to find a competitive loan to finance your business, speak to our experts today.

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Frequently Asked Questions

The following are some of our most frequently asked questions:

What Is An Unsecured Business Loan In Melbourne?

An unsecured business loan is a type of finance a business can qualify for without putting up assets as collateral. Without loan security, however, these loans often incur higher interest rates and less flexible repayment terms.

What Do I Need To Get An Unsecured Business Loan?

You will need a good credit history, strong financial performance as a business and provide supporting documentation to apply for unsecured business loans. These documents can include financial statements, cash flow statements, tax returns, proof of operation, your ABN and other trustee agreements or proof of incorporation.

How To Apply For Unsecured Business Loan?

These are some general steps to apply for unsecured business loan Melbourne finance options:

Prepare a business plan and budget for your loan to work out the type of finance you need
Find out how much you need to borrow, for what purpose, how much you can afford to repay and over what period
Compare lenders and loan products to choose a suitable loan and check your eligibility
Gather supporting documents to prove your income, credit history and business performance—examples may include bank statements, credit sales or merchant statements, balance sheets, and other business documents
Provide business details such as ABN, structure, location, industry sector, turnover, and how long you’ve been in operation
Submit your application with your supporting documents
The lender will assess your loan compared to your creditworthiness to determine your eligibility
Once your loan is approved, you will sign a loan agreement and receive financing
Make your loan repayments on time according to your payment schedule

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We love to hear from each and every one of you. Please feel free to reach out to us today!

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1800 300 777

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info@breakfreehomeloans.com.au