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Aboriginal and Indigenous Business Loans
Find out more about the available options for financing your Indigenous business and compare offers with Savvy.
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Before you start the process of applying for financing for your business, it's important to have a clear understanding of what your options are for receiving funds, both from business financiers and government agencies. You can compare and consider loan offers from Savvy's reputable Australian lending partners here.
What loans are available to Aboriginal and Indigenous businesses?
There are a wide variety of both loans and lenders available to support Aboriginal and Indigenous businesses. Some of these are standard loans available to anyone, such as secured and unsecured business loans, equipment finance, business credit, and invoice financing. Others are dedicated business loans specifically established to support First Nations communities, such as an IBA producer loan or startup finance package.
Lenders range from the big banks right though to smaller online lenders and other alternative lenders. There’s no restriction on what types of loan an Aboriginal and Indigenous business can access. While larger lenders like banks are able to offer finance to businesses, online lenders are particularly valuable for remote regional communities, as there’s no need to deal directly with a branch. Online lenders operate entirely over the internet (and sometimes by phone), meaning all you need is a computer and an internet connection and you can get access to a loan to support your business. There are also a number of organisations set up with the specific goal of supporting Aboriginal and Indigenous businesses and First Nation communities, such as Indigenous Business Australia (IBA).
Savvy’s a useful place to begin if you’re looking for a business loan, as you can view a range of unsecured business loans from a variety of Australia’s top online lenders and compare your options to help you choose the best for your business. You may also want to gain an idea of the cost of different loans based on varying interest rates, terms and sizes, which you can do right here with Savvy with our business loan repayment calculator.
Is there other support I can get for an Aboriginal or Indigenous business?
There are various grants and other ways to get support for an Aboriginal or Indigenous business – either as an alternative to a business loan or in addition to one. Some of these are provided by the Australian government, while others are associated with other organisations with a focus on supporting First Nations communities. Some examples of grants include Indigenous Business Australia's Business Development and Assistance Program and the Indigenous Advancement Strategy (IAS), run by the National Indigenous Australians Agency (NIAA).
The NIAA also offers additional information, training and business support, as do organisation such as the Office of the Registrar of Indigenous Corporations (ORIC) and IBA. IBA also has various specialised loans for Aboriginal or Indigenous business, including producer loans, business loans and their startup finance package.
It may also worth looking into the New Enterprise Incentive Scheme (NEIS), which is a general government scheme supporting Australians starting a new business. There’s no lump sum payment to support a business, but it provides a living allowance, support and training for new business owners. There are around 6,300 slots available nationally each year, however, so only a limited number of ventures are approved annually for support. There are also grants available to Australian female business owners, but you may find a business loan for women is a better option for your company.
The Australian Government actually maintains an online searchable database of available grants, which includes a number of options for Aboriginal or Indigenous businesses. You can utilise this tool to check which grants are available in your region.
Types of business loan
The most common type of business finance, unsecured loans enable businesses to access the funds they need without attaching an asset to the loan as security. Some lenders may allow you to borrow up to $500,000 and, because there's no collateral, offer same-day approval.
If your business already owns valuable assets, such as property or expensive equipment, you may choose a secured business loan instead. These loans may increase your borrowing power beyond what an unsecured loan can offer and, crucially, typically come with lower interest rates.
Business loans don't always have to be worth hundreds of thousands. If you're operating a small business and need a boost to help you keep on top of your expenses or expand your company, you may be able to take out a loan starting from as little as $5,000 and unlock further capital.
Just because you don't have all the required documents for a standard business loan doesn't mean you're out of options. Low doc finance enables you to use alternative documentation, such as other business financials, in the application process to access the funds you need.
A commercial line of credit allows you to draw from your loan account whenever your business needs access to their funds, instead of managing a lump sum and repaying it like a regular loan. This can add flexibility to your finance arrangement, providing money when you need it.
Invoice finance presents another option to business operators looking to free up cash through outstanding invoices yet to be paid by their customers. Your invoice finance can either be invoice discounting or factoring, which present different options when it comes to your invoices.
A common reason for seeking out a loan is to purchase commercial equipment. You can do this either with an unsecured arrangement or one with the equipment itself as collateral, with the latter potentially increasing your borrowing power and lowering your interest rate.
With this finance, when your business purchases product, your supplier provides an invoice which you send to your financier and pledge to repay by a set date. From there, your supplier sells the invoice to your financier at a discounted rate, while you repay the full amount to your financier.
Under an inventory finance agreement, your lender pays your supplier directly for inventory, which allows it to be signed off and sent to you. From there, you can pay off your debt within a pre-determined period to your lender, which may be longer than the regular debtor period.
An overdraft facility is attached to an existing financial account belonging to your business, such as a transaction or savings account, and enables you to borrow up to a set limit after the account’s balance reaches zero. These overdrafts are repaid with interest, but only on what you use.
You may simply be in a position where your business needs a boost to its cash flow. If this is the case, there’s a range of stop-gap solutions which may be suitable for your situation, from standard unsecured loans to specialist cash flow loans, invoice finance or even an overdraft.
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What factors about my business might help my loan application?
Length of trading
Many lenders have a distinct preference for loaning to businesses who’ve been in operation for some time and clearly have a good track record of steady trade.
Being a newer business isn’t a deal-breaker, but it makes approval a little harder and might mean your business is offered less money and higher interest rates.
Broad appeal and a wide customer base
What’s the customer base for your business like and how easy is it to get new buyers? A business that has a broad appeal for a wide range of customers and currently has a very good customer base will probably be better regarded than one which has a specific niche market that depends on a small number of key customers for success.
Growing industry
Is the industry your business operates in one that’s expanding, remaining stable or on the decline? An established veterinarian or carpenter can probably expect a fairly steady amount of business, while a well-regarded restaurant in a rapidly growing residential district might be seeing more and more business in future – and both of these can be appealing to a lender.
Visibility (physically or otherwise)
Is your business highly visible to the public? This doesn’t just mean in a physical sense – it means being generally in the public eye and can include your presence in the media or online.
Your business might sell entirely over the internet, but if your Facebook page has 200,000 followers, it’s fair to say that you’re visible.
Common questions about Aboriginal & Indigenous business loans
For online lenders, information security is a core part of the business – they won’t stay in business long if they can’t keep people’s data safe. Most online lenders use high level encryption security on their websites, so any details you’re submitting over an online application are protected. The main risk is a third party tricking you into giving them your details – so be wary of unsolicited requests for sensitive information and contact your lender directly if you’re unsure. Also, be careful what you send over email – that's normally not encrypted. Ask your lender about security if you have any questions.
It can make it harder, but not impossible – there are many lenders on the market who can work with unconventional types of income, including seasonal income. You should still be able to access a loan to support your business.
Yes – sole traders are still regarded as perfectly legitimate businesses. If your business has a particularly small cash flow, that may limit your loan options a little, but the fact that you’re a sole trader in itself should have little to no impact on getting a small business loan.
Business loans in Australia are flexible and the funds from a conventional business loan can be used from a wide variety of things – including upgrading equipment, leasing a premises, paying staff, or hosting an event. The money needs to be used specifically for business purposes (business finance and personal finance require different licences, so you can’t use one for the other), but other than that it’s up to you how the money is used. Government loans and grants might have additional requirements on how the funds can be spent, but will be explained on the relevant website.
Yes – a good or bad credit rating can influence various things when applying for a loan: the interest rates you’re offered, the amount you can borrow and how easy it is to get approval. If your credit rating is particularly good, it gives you more borrowing power and afford access to much better interest rates.
Online lenders normally have very streamlined loan application processes, so the initial application might only take a few minutes (provided you have all your information ready to hand). Unsecured loans are a particularly quick and easy option for a business loan, and can generally be turned around (and have money in the bank) within one to two days of the initial application.
Helpful business loan guides
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