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Online Business Loans
You can take out a business loan online without ever needing to leave your office. Explore your options with Savvy here.
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Business loans are a common feature of commercial finance nowadays, but is it viable for you to apply for a small business loan entirely online, from the comfort of your own office? Learn the ins and outs of online business loans, how they work and how to compare your options in this guide.
Is it possible to get a business loan entirely online?
Yes, it is. It is entirely possible – and quite practical – to get a business loan 100% online without the need to ever leave your office.
With the growing prevalence of online lenders on the Australian loan market, it’s now easier than ever to apply and get approved for a business loan. The internet is also a great place to loan hunting, allowing you to find not just a loan, but the perfect loan for your business. For example, Savvy allows you to quickly compare business loans from some of Australia’s top online lenders and pick one suited to your circumstances, saving on time and hassle. In doing so, you can boost your chances of choosing the best loan option for your business and picking out a lower interest rate.
Not only is information easily accessible for you over the internet, but lenders themselves can now make use of fast, secure internet services to quickly access financial and credit information – which means the process of getting your loan assessed and approved is now much quicker.
All of this means that it’s not only possible to get a business loan online, it’s fast, easy, convenient and generally recommended for small business owners, as you can even receive a near instant outcome in just a couple of hours.
Are there any risks to getting a business loan online?
No – modern lender websites use high-grade encryption technology to ensure that your information is submitted securely and stored safely on their servers. It’s reasonable to be cautious about online security, of course – we’ve all heard stories about hackers on the internet – but for online lenders, data security is a very high priority. Digital security is as important to them as a vault is to a bank.
When it comes to the transferring business loan funds in Australia, online lenders are no different to the majority of business lenders nowadays – everything is handled electronically via ultra-high security electronic funds transfer (EFT) services, so funds transferred from an online lender are as secure as any bank transfer.
It’s worth knowing that you still need to be careful with how your information is handled. Be careful with what information you send via email, which normally isn’t as secure, and never give your bank details, log-in details or financial information to someone who’s contacted you unsolicited – even if they seem to be from your lender or financial institution. If in doubt, contact the financial institution yourself (using their official contact details – not something from the unsolicited message) and ask about it.
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's the application process for an online business loan?
Apply via the website
The first step is to apply for your small business loan online. This can be directly via the lender’s website if you already know the lender you want, or you could start with Savvy’s comparison tools to compare options and find the best-fit lender for your circumstances.
The application process is normally quite quick and painless, although you might want to have your financial details and records on hand so you can find key details easily.
Contacted by the lender
Once you’ve submitted your application, your lender will review it and get in touch with you – generally by phone or email.
They’ll discuss any extra information they need and let you know how to submit any supporting paperwork electronically – which could include business plans, financial records, bank statements and ID.
Submit supporting paperwork
Once you’ve gathered these records and submitted them to the lender (they’ll let you know what their process is for doing that), they can finish the process of assessing your application and approving it.
Receive final documentation
Once your business loan has been approved by the lender, you’ll be sent the final documents. This will include reference material for you, such as detailed terms and conditions and a privacy statement, and will have a final contract – generally with details about how to sign and submit it electronically.
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Submit, get paid
Once you’ve signed off on – and submitted – the loan contract, the loan in finalised and the money can be transferred. This will normally be within 24 hours (although your bank can sometimes delay the process).
Frequently asked questions about online business loans
Your paperwork will be submitted electronically, which does mean you’ll need digital copies of it. Lenders have different ways of doing this, so you should follow their instructions on how to do that and ask them if you have any questions.
Online lenders can offer most of the standard types of business loan that big banks and larger lenders can, including secured and unsecured loans, merchant cash advances, equipment finance, commercial mortgages, hire purchase, invoice financing and chattel mortgages. They also often have options for bad credit and low doc loans.
Yes. As a matter of fact, online lenders are excellent for small businesses in remote regions, as you never need to travel to a branch to get a loan. All you need is a computer, a phone, an internet connection (which modern mobile phones can often provide), and your business records and ID. A scanner can be handy if you have paper documents to submit, but this isn’t always needed – particularly if a lot of your business records are stored electronically.
No. Normally, online business lenders will have websites – and loan application pages – that are easy to use, and operational 24/7. That said, you normally will have to wait until business hours for the lender to review your application and progress things forward, but you can submit it at any time. If you submit at, say, 3am on a Saturday morning, it’s quite likely to be the first cab off the rank on Monday morning.
Some do have an office or headquarters that you can visit, although it’s uncommon. Either way, most online lenders make a point of being easy to contact in other ways – via phone, email, or other digital means.
Actually, it’s normally easier. Large financial institutions like banks can often be picky about who they’ll approve for a business loan. Online lenders are generally a lot more open (by comparison), and willing to consider applications from very small businesses, start-ups and businesses with less-than-perfect credit ratings. If your small business isn’t having much luck applying for a loan from the big banks, an online lender might be a good option.
Business loans are highly flexible and are able to be used for just about any business-related purpose. For instance, you might want to take out a loan to boost your company’s overall cashflow, consolidate existing debts, help with your employees’ salaries, purchase new equipment or fit out your storefront. The sky is essentially the limit when it comes to how you can make use of your loan funds.
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