You can see business loans as a helping hand for entrepreneurs who want to realise their dreams in business. In the finance industry, business owners are known to have used loans for all sorts of things – from taking on new clients, opening new premises, and sustaining daily operations. Business loans can also save small business owners when the tax man is knocking or if there are debts to be paid. Whatever the reason you have for taking on a loan, the additional financing will sustain and boost the growth of your business.
We take you on a quick run-through of the financing options available for small business owners. If you don’t qualify for traditional loans, there are still other options available for you.
Financing Solutions for Businesses
SBA Loans are for established and profitable small businesses who are looking for bigger loans that they would not usually qualify for. It is an initiative by the Small Business Administration to empower small businesses in marginalised areas.
Traditional Bank Term Loans
Bank term loans require you to provide a collateral. You’ll have to make regular monthly payments until the loan plus interest is fully paid. The good thing about term loans is that the interest rates are usually lower than other types of loans.
Business Line of Credit
A business line of credit allows you to borrow an agreed amount and only pay for the interest on what you use. It’s a revolving line of credit that will reset when you’ve paid off the initial loan amount.
Business Equity Loan
You’ll have to provide collateral for this type of loan, which is in the form of residential or commercial property. You can borrow up to 100% of the value of a residential property used as security for the loan.
You can use asset-based loans where instead of paying for the full cost of the equipment upfront, you can pay for it in installments. Lenders will focus more on how much the equipment will cost instead of your credit score.
Business Credit Cards
Business credit cards are a popular form of small business finance, but the interest rates are usually high. They do offer an interest-free period on charges.
What are the Financing Options for Bad Credit?
If you have poor credit, a merchant cash advance can be a good option to look into. A lender will give you a lump sum of money, which you pay back through a fixed percentage of your daily credit and debit card sales.
If you haven’t established any financial statements and proof of income for the past two years, a low-doc loan could be an option. Low-doc and no-doc options are backed by residential property. The downside to this kind of loan is that they have higher interest rates.
Another type of loan you can tap into is unsecured loans. You won’t have to provide collateral or go through a complicated application process. The lender will analyse your finances, which includes bank transactions and other information, to determine how much will be loaned to you.
If you need to get an overview of all financial products available for business owners, check out Bizzloans New Zealand which matches you with the most suitable lender and business loan. Start with a free quote below.
Russel needed an injection of cash to pay his employees while he was waiting to be paid. We were able to have the funds in his account 48 hours after he first applied.
Max needed funds to renovate his restaurant in NSW. He didn’t want to put his property on the line to secure a loan with the bank. We were able to get him over 100k without offering any security.
Anna needed funds to renovate her practice in Adelaide. We were able to get her the funds she needed with only providing her business bank statements and photo ID.