Which entrepreneur doesn’t dream of starting a successful business? Millions of Australians have shown entrepreneurial activities.
If you are a young Australian looking to join them, raising the necessary funds to grow and start your business can be a stumbling block.
There are plenty of lending options available to finance a business, but the terms that come with the money can sometimes be extremely difficult to accept.
Here’s an overview of 7 business loans you can consider to help you start or grow your business:
1. Unsecured Business Loans
Unsecured business loans are short-term loans usually with a maximum of 12 months. This type of loan doesn’t have any security attached to them. Often, you’re required to make payments daily, weekly or monthly. Getting approved for unsecured loans is often fast, and all you have to do is provide the lender with a bank statement of the last 3-12 months.
Unsecured business loans are suitable for paying unexpected expenses, marketing costs, and tax bills. Applying for unsecured business loans online is more convenient than physical banks.
2. Business Finance
Standard business loans are another excellent choice for young entrepreneurs looking to start or grow their business. They are flexible and have loan amounts that range between $5,000 and $500,000.
Another reason why standard business loans are great for Aussie businesses is that the loan repayment period can range from months to years.
Business finance loans can help in every stage of your business. You can apply for one for cash flow, supply funding, equipment or asset finance, or any other aspect of starting or running your business. Standard business loans can be accessed via traditional banks or online brokers.
3. Equipment Finance
Equipment help ensure the smooth operation of a business. Unfortunately, purchasing equipment can be quite expensive. This is where equipment finance loans come in – they are loans used for the sole purpose of buying items such as vehicles, computers, heavy equipment, printers, and any other equipment.
Equipment loans are normally secured against the item they are being used to purchase. So entrepreneurs don’t have to secure the loan as they would with a secured business loan. But should you fail to repay the loan, you risk getting the equipment repossessed.
4. Short-term Business Loans
Typically, any loan that has a repayment period of less than 12 months can be labelled as a short-term loan.
According to the team from MaxFunding, “36% of businesses in Australia reported that the main reason entrepreneurs sought out loans is to overcome short-term cash-flow issues. You can use same-day loans to take care of unexpected bills but don’t be surprised if the fees are higher than usual. After all, these types of loans are quite convenient when you need money fast.”
5. Trade Finance
Trade finance is a type of unsecured small business loan that is also referred to as import finance or supply chain finance. Make sure you practice due diligence regarding the fees associated with the loan before you apply.
Supply chain finance is an excellent choice if your Australian business is regularly purchasing supplies or stock/inventory from local or international suppliers.
6. Business Line of Credit
A line of credit business loan is suitable if your financial needs fluctuate. Cash-flow is what keeps any business running, and having access to quick cash can save your business when you find yourself in difficult situations. When it comes to business line of credit loans, the faster you clear the loan balance, the better unsecured loan rates you get.
Apply for a line of credit business loans if you often find yourself in need of quick access to business funding.
7. Invoice Discounting
Overcoming cash-flow issues can be a major obstacle for any small business, and receiving payment for invoices late only makes things more difficult. And given that many businesses don’t have a problem with waiting weeks for payment, invoice discounting can be a lifesaver.