How to Get a Small Business Loan

There are several key steps involved in the process of how to get business funding in Australia, so it’s important to understand what you’ll need to do to secure the finance deal you’re looking for. You should look to meet the following points along the way when considering what loan to get:

Consider the purpose of your loan

First and foremost, you should understand the purpose of your loan as a small business owner. How much do you need? What do you need the money for? How great is your need for financial assistance? It’s important to ask yourself these questions before plunging into your application, as taking on a loan is a big commitment. It can be helpful to put together a plan of exactly what needs to be covered so you can map out the costs required, as this reduces the chances of borrowing more than you need and paying a considerable amount more overall. Make sure you know whether it's a small cash advance you need or a larger loan repaid over a longer term.

Its purpose may also impact the type of loan you end up taking out. For instance, if you’re only looking for a $10,000 injection for cashflow, a basic unsecured small business loan is likely to do the trick. If you’re renovating your business premises and would prefer to take out money as you need it to pay your builders, you may prefer a line of credit with a higher limit.

Compare your small business loan options

Of course, it’s important to compare as many options as you can before taking the plunge with one particular lender. You can do this here with Savvy, as we break down offers from our lending partners so you can analyse all the areas that matter the most to you. Are you looking for offers with the lowest interest rates? Maybe you’re wanting a loan with a particular available loan term, a high maximum borrowing range or features such as free early repayments. You can consider the key points of each loan deal all in one place.

Review lender requirements

Of course, there’s little point in wasting time with a business loan if you don’t meet the eligibility requirements of the lenders you’re considering. Although the specifics will differ between different lenders, the main points male, non-binary or female operators looking for finance will be required to meet as part of your application are:

• A minimum trading period of six months
• A minimum monthly turnover of $5,000
• You must be 18 years or older
• You must be an Australian citizen or permanent resident
• You must have a valid ABN or ACN

Think about the fees you may be charged

There are several different fees which you’ll need to consider when choosing your business loan. They’re likely to differ between lenders, with some able to waive certain charges what others don’t, so carefully analysing what these are will help you save overall. The primary fees to look for are establishment and ongoing costs, both of which can be as little as $0. Additionally, some lenders will charge a fee for paying off your loan early, which can be dependent on the size of the loan and the time left to run on it.

Gather the documents you need

Next, you’ll need to gather the documentation required for your loan application. These will include:

• Your ABN/ACN and GST registration
• Personal identification such as your driver’s licence or passport
• Access to online bank statements
• Expenses such as rent

If your loan is larger (usually above $250,000), you may also need:

• Profit and loss statements
• Balance sheets
• ATO Integrated Client Account information
• Accounts receivable and payable
• Tax returns
• A detailed business plan

Submit your application

From there, you have all the information and documents you need to go ahead and apply for your business loan. You’ll need to fill out your lender’s application form, which you can do online, after which you can submit it directly to your lender via their online portal.

Receive your outcome and funds

You can receive your outcome very soon after, with fast approvals in as little as an hour available from some lenders. Upon approval, you’ll be sent through a loan contract to sign, which can be done electronically, after which funding is available as soon as the same day you submitted your initial application.