Business Loans Melbourne

Name: Business Loans Melbourne
Creator: Savvy
Published: 2022-01-14T15:40:17+10:30

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Written by , updated on September 21st, 2023

The features and benefits of business loans in Melbourne

Borrow what you need

You can access as much as $500,000 with your finance deal, with small business loans of as little as $5,000 available to fill a wide variety of roles across your business.

Don’t worry about asset security

These finance deals are unsecured, meaning you won’t have to worry about putting up your house or any of your business’ assets as collateral for your loan.

Choose your preferred repayment term

You have the ability to take out a financing deal to suit your needs as a business and ensure your repayments are manageable, from three months to five years.

Pay your loan off ahead of schedule

We partner with lenders who won’t penalise you when it comes to repaying your loan early, enabling you to potentially save a significant amount for your business overall.

Competitive rates and fees

With lenders in the market jostling to help your business out, you can take advantage of competitive interest rates and fees to help you save throughout your loan term.

Apply from the comfort of your office

The application process is highly convenient and 100% online, so you can submit all your documents and application form directly to your lender 24 hours a day.

Types of business loan

Unsecured business loans

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.

Secured business loans

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.

Small business loans

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.

Low doc business loans

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.

Lines of credit

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

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.

Equipment loans

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.

Supply chain finance

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.

Inventory finance

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.

Overdraft facility

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.

Cash flow loans

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.

Why compare business loans through Savvy?

100% free service

It won't cost you a cent to compare a range of business loans through Savvy, enabling you to come back at any time.

Reputable lending partners

You can compare business loan offers through a range of trusted Australian lenders, giving you more confidence in the process.

Online comparison process

You can fill out our simple online form to generate business finance quotes tailored to your business' needs in minutes.

Top tips for saving on your business loan

Compare as many loans as you can

Perhaps the simplest way to net yourself a great unsecured small business loan deal in Melbourne is to compare your options as thoroughly as possible with Savvy before committing to one single offer. You’ll maximise your chances of saving by doing this one simple thing: taking a bit of time to analyse the market and make an informed choice on not only the most affordable loan but the one whose features best suit you.

Contribute some of your business’ revenue

If you’re in a position to do so, paying some of your business’ available funds towards whatever expenses need covering will help you reduce your loan amount and, in turn, the interest and fees you’ll need to pay. This essentially functions as an interest-free deposit, which could be very helpful in the long run (particularly if your interest rate is on the high side).

Pay out your loan earlier

By shortening your business loan term, you’ll reduce the interest charged on your loan. This is because it’s calculated based on your outstanding loan principal on a daily basis, so if your loan debt reduces more quickly, so too will the interest charged. Opting for a shorter loan term will help accomplish this, although you shouldn’t take on a greater monthly commitment than you can afford, while extra repayments will have the same effect.

Take advantage of tax benefits

Finally, you should also be aware of the potential tax benefits which come with a business loan in Australia, namely the fact that interest on your payments can be tax-deductible. This is important to know, as this can save your business hundreds, if not thousands, of dollars over your loan. Your full repayment isn’t claimable, though, as the principal portion will be covered by you.

The business loan application process explained

Compare loans and lenders

You can do this here with Savvy. Make sure you choose a lender who offers a product which suits your needs, with affordable repayments and flexible features.

Collect all the required documents

You’ll need to gather all the documents you need for your application, which in most cases will only be personal ID, business bank statements, your ABN/ACN and GST registration and a record of your rent.

Submit your application

The application form offered by your lender will only take a matter of minutes to fill out, which you can then submit with your documents directly to your lender.

Sign off and receive your funds

After receiving an outcome in as little as an hour after submission, you can sign off on your loan contract and receive your funds directly in your account not long after.

Frequently asked business loan questions

What can I use my business loan funds for?

Just about anything you like – business loans are designed to be utilised across any facet of your business. Whether you’re seeking to purchase new equipment (which can also be done via equipment finance), finance the fitting out of your business’ interior or even to purchase an existing business franchise, your loan can help you achieve your goals.

How is a line of credit different to a business loan?

A line of credit is seen as a more flexible type of business loan, whereby you’re approved for a certain limit (such as $150,000) and are able to withdraw funds from an account up to that limit at any time you like. You’ll only have to pay interest on the funds withdrawn, meaning if $50,000 ended up being unused, you wouldn’t be charged for it. Businesses prefer this as it presents an option beyond simply advancing a lump sum and starting repayments immediately. However, interest rates can be higher with these loans.

Should I just use my business credit card instead?

Probably not – if you’re only making small purchases which can be paid off within your card’s interest-free period, it may be the better option for you in that instance. However, if that isn’t the case, a loan is likely to be better, as cards come with significant interest rates which can mount up if you leave debt rolling over into the next month.

Can I get a commercial loan in Melbourne if I’m running a startup?

Yes – however, it’s more difficult to do so. Business lenders will scrutinise applications for startup business loans more closely, as they’re considered a greater risk of default than an established, successful operation. You’ll typically need to have run a business before or hold skills transferrable to your new business, but even then, you’ll receive a higher interest rate and significantly lesser borrowing range.

How do lenders work out how much my business can borrow?

There are several factors which weigh on the minds of lenders when assessing how much different businesses are eligible to borrow. Some of these include:

Monthly and annual turnover
Expenses
Time trading
Business credit score and that of the owner
Assets and liabilities
Revenue forecasts (via a business plan)

If you wish to crunch the numbers on what different loans might cost you, though, you can make use of Savvy's business loan repayment calculator to help you compare your options.

What if I don’t have all the documents needed for my application?

Some lenders will offer low doc business loans to borrowers who don’t have the required financials to otherwise complete their application. This is often the case for new businesses, so these present themselves as an option for those in this position. However, these will generally also come with lower borrowing ranges and higher interest rates. It’s important to note that many online financiers have made it far simpler for businesses to get approved without financials, as business bank statements are considered full financials by many operating in the market today.