Are you feeling stuck with your small business financing? Are you looking for ways to reignite growth and improve cash flow? If so, you could consider the power of unsecured small business loans.
Unsecured business funding for small businesses can provide the financial boost you need to kickstart your business to take it to the next level or overcome a challenge.
Whether you are starting a new business or trying to breathe new life into an existing one, small business financing can help you cover the costs of equipment, stock, marketing, and improve cash flow through a seasonal downturn.
Here’s our tips on a successful process whether you are searching for startup business loans, small business financing, unsecured small business loans, or simply looking for ways to improve your business performance, these tips will help you get started.
- Determine your finance needs. Before you start applying for loans, it is important to understand exactly how much money you need for your small business financing. Be sure you can communicate the purpose and benefit of the loan funds you’re seeking
- Shop around for the best loan option. It’s obvious you want the best rates and fees but it’s not always obvious which lender to approach. Seek out a lender who has a proven track record of offering the amount of lending you’re seeking and looks favourably on your industry and credit rating.
- You might need a cash flow forecast and a solid business plan. Get guidance from a professional; sometimes a plan and a cash flow forecast showing the next 12 months expected revenue and expenses can be excellent to demonstrate you can service the business loan and make a compelling case for your loan approval.
- Consider unsecured small business loans if you don’t have property to use as security (or don’t want to use property security for your loan) – an unsecured business loan can be a great option.
- Use the loan wisely. Once you have received your business loan, make sure you use the funds productively to invest in growing your business.
There are essentially two types of Unsecured Business Loans in Australia; An Unsecured Term Loan and an Unsecured Overdraft.
How Does an Unsecured Business Overdraft Differ from an Unsecured Business Loan
Both types of financing can provide you with the funds you need to start or grow your business, but they are not the same thing.
Unsecured Business Overdraft
Also known as a revolving line of credit, an unsecured business overdraft is a working capital solution for businesses of all sizes. It gives you instant access to cash so you can support your clients and grow your business.
An unsecured business overdraft is often used for short-term funding needs, such as covering unexpected expenses or taking advantage of a business opportunity and then repaid once the opportunity has been realised. The benefit of this is that it gives you access to capital whilst you only pay interest on your funds in use.
An overdraft is best used when supporting a business in its daily function.
Unsecured Business Loan
An unsecured business loan, or term loan, is a lump sum of money that is provided to your business. This type of financing is usually used for larger expenses, such as purchasing equipment or expanding your business. Unlike an overdraft, you have a set repayment period, interest rate, and payment amount.
This type of small business financing is best used when implementing a longer term business strategy.
Which is Right for You?
The type of financing that is best for your small business will depend on your specific needs and goals.
If you’re looking for a line of credit to support your business daily function an unsecured business overdraft may be the better option. However, if you have a larger expense or strategy you’re seeking to put into action an unsecured business loan may be the way to go.
Not sure which lender has the best rates and fees for your business loan? We do loans for small businesses. Get unsecured business funding today – get access to the credit you need to do business the way you want.
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