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.
What Are Unsecured Loans For Business
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
Choose The Right Lender
Prepare The Documentation
Receive Finance
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 a 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.
What You Should Know About Unsecured Business Finance?
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
Fees
Repayments
Alternatives To Unsecured Business Funding
Secured Loans
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.
Business Credit Card
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.
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?
Frequently Asked Questions
What Is An Unsecured Business Loan In Melbourne?
What Do I Need To Get An Unsecured Business Loan?
How To Apply For Unsecured Business Loan?
- 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
Contact our team
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