Business Loans Australia

Pretty much anything you need – provided it’s business-related. Businesses large and small can use loans for an array of purposes, from contributing to their cashflow to fitting out their premises to purchasing another business. Many business owners will use their funds to help cover staff wages, while others might wish to buy substantial equipment they can’t quite afford to pay for upfront. Alternatively, if your business has built up sizeable debts, you can consolidate them into one loan to manage them more easily and potentially save money over the course of your loan.

Not always – we work with lenders who won’t require you to supply a personal guarantee or that of one of your company’s directors as part of your medium or small business loan application. Personal guarantees essentially act in the same way a guarantor would for a home loan: by doing so, you’re guaranteeing the repayment of the loan to your lender, even if your business becomes unable to manage its repayments.

Yes – some lenders in the market can approve temporary residents for small business loans in Australia. However, not all visas are eligible to receive loans or start a business, so you’ll need to cross-reference this with your lender. You’re likely to require a Business Innovation and Investment (Provisional) visa (subclass 188). Additionally, you’ll need to make sure your loan is completed several months prior to your visa’s end date.

Most lenders will require you to have been running your business for at least six months before you apply, but some raise this to a minimum of 12 months. Alternatively, there are specialist lenders who can approve startup business loans in Australia, meaning there won’t be a minimum requirement. However, they come with significantly reduced borrowing power and higher business loan interest rates, as well as greater scrutiny on your personal credit file and whether you’ve run businesses in the past and/or have skills transferrable to the business you’re starting up.

Lenders will always set a minimum monthly or annual turnover as part of their set of eligibility criteria. This minimum, in some cases, will sit at around $5,000, although others may require a more substantial annual turnover of greater than $100,000. Always check your lender’s criteria before applying to make sure that your business is generating enough money to qualify.

Yes – seasonal businesses can access business loans, but they’re likely to look slightly different to the standard personal loan. These may be agricultural businesses or those who rely on warm weather. Because of a lack of business in their off-season, lenders consider these types of businesses a greater risk, which can attract higher rates and reduced borrowing power in some cases.

Yes – providing an asset as security for your loan can help you substantially increase your borrowing power and reduce your interest rate. This is because they’re considered safer by lenders, as they have something to fall back on in the event you become unable to support your repayments. You can utilise either commercial or residential property as loan security, as well as vehicles, equipment and appliances (which is known as equipment finance). These loans often take longer to process, as they’re generally larger and require lenders to assess the suitability of your asset.

Not necessarily – if you’re looking to make smaller purchases that can easily be paid off quickly, a credit card might be a good option for your business, as they’re convenient and sidestep the need to apply for financing. However, if you want to make a more expensive purchase and aren’t likely to be able to pay it off within your card’s interest-free period, you might be better off with a loan. This is because any outstanding balance on a credit card will attract considerable interest and fees, which are usually much higher than those of unsecured business loans in Australia.