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Private Business Loans
Find and compare a range of private business loans with Savvy to help secure the best deal for your business.
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The features and benefits of private business loans
Competitive interest rates
With fewer overheads and increasing competition in the market, business operators can expect to find and compare some of the lowest interest rates available in the market.
No asset security required
Unlike some lenders, many private lenders for business loans can offer financing without the need for collateral, giving you a wide range of unsecured business loans to compare.
Flexible borrowing ranges
Business loans can be taken out for a variety of purposes and are designed to cover expenses big and small, with loans available for as little as $5,000 up to $500,000.
Customisable term lengths
You can also tailor your loan’s repayments to fit your business’ revenue limitations, with loans as short as three months and as long as five years on offer to businesses.
Early repayments without penalty
Many of our private money lending partners for business loans will allow you to contribute above the minimum required amount, enabling your business to pay off its debt sooner.
As few as six months of trading
It’s usually much simpler for small businesses to get approved for financing with a private lender, with fewer documents required and as few as six months of trading under their belts.
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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Top tips for reducing the cost of your business loan
Plan out exactly what you need
It’s useful to enter the application process with a clear idea of the exact costs your business needs to cover. You should plan this out in advance, mapping out each of the costs and working out how much each of them are likely to cost. Doing this reduces the likelihood of over-borrowing, which can saddle your business with a larger debt than necessary and impact its long-term finances.
Claim your interest payments as tax deductions
Failing all of this, though, you can simply claim the interest portion of each business loan repayment as a tax deduction. This entirely negates the need to worry about the interest charge overall, although this can only generally be done at the end of the financial year, meaning it won’t affect available cashflow as soon as you might need. It’s useful to combine the deductions with the other steps to help reduce the strain on your business.
Offer loan security
While many private lenders deal almost exclusively in unsecured business loans, there are options on the market which can allow you to utilise asset collateral to secure a larger loan with lower rates and fees. The reason for this is that lenders consider secured loans to be safer. This can be anything from equipment owned by the business or equity in a residential or commercial property.
Make additional repayments
Paying more than you’re required to is a simple and effective way to reduce the potential cost of your business’ loan and free up more revenue in the long run. By more steeply reducing the principal your business owes your lender, the interest charged on the loan will also go down with each repayment at a faster rate than it otherwise would. If the loan comes with monthly fees, you can save on these too.
The private business loan application process explained
Compare loans with Savvy
Take the time to compare different finance offers with Savvy, considering all the most important factors, before choosing your lender.
Gather your documents and apply
Ensure you have all the right documentation to submit first time around along with your application form to help save on time.
Receive an outcome and sign your contract
Once this has been submitted, your lender will assess your business’ case and, if approved, they’ll send through a loan contract to sign.
Have the funds available for business use
After you return the contract, the approved funds will be transferred directly into your business’ account for your use.
More common questions about private unsecured business loans
In some cases, business loans can be approved within just one hour of submitting your application. In terms of the funds being sent through, in some cases, this can be achieved in as few as three hours. However, this isn’t the case for all lenders, as some will naturally take more time than others. On top of that, there are various individual factors which will have an impact on the time it takes, such as the complexity of your business’ financial situation and whether you have all the right documents.
Yes – non-private lenders such as banks will rarely be able to approve an application from a startup business which doesn’t meet their eligibility criteria, as they’re generally much stricter in this respect. However, there are specialist private lenders who offer startup business loans to those who fall in this camp. Because they’re perceived to be a higher-risk proposition, though, they generally come with lower borrowing ranges and higher interest rates. You might also stand a better chance of approval with a peer-to-peer business loan, whereby your application is assessed and funded online by anonymous investors.
If you’re looking at applying for a smaller loan amount, you’re likely to only need your business’ ABN/CAN and GST registration, bank details, record of rent and your photo ID. For larger loans (typically upwards of $200,000), though, you’ll also need to supply detailed business financials, which can include the following:
- Balance sheets
- Tax returns
- Profit and loss statements
- ATO Integrated Client Account information
- Revenue projections in a business plan
There are a variety of factors which may come into play when your lender assesses your business’ borrowing power. Some of the reasons why your lender may consider approving your business for more or less funds include:
- Your business’ credit score: this indicates whether your business has been reliable when it comes to repaying other debts, including past loans, and whether it’s been bankrupt previously
- Your business’ turnover: the more revenue your business generates, the more it can afford to take on and repay in instalments
- Your business’ assets: if your business is backed by assets, or if you own property, it may be eligible for a larger loan
A business line of credit is a viable alternative to the standard business loan which also offers a unique level of flexibility. This is because, rather than being granted a lump sum and gradually repaying it in instalments, your business will be approved for a certain limit and you’ll be able to withdraw funds whenever you like up to that maximum limit. The other primary benefit is that this type of finance enables you to only pay interest on the funds you use. You can compare line of credit business loans with Savvy.
Yes – there are many grants on offer for small businesses both at the federal and state levels of government. These can change frequently, so it’s always important to review your state government’s website, as well as that of the Australian Government, to ensure you’re not missing out on much-needed assistance. Some of these include Regional Development Australia, Indigenous Business Australia and the CSIRO Kick-Start program.
Yes – a common reason for businesses taking out loans is to consolidate debts currently outstanding. These may come from a variety of sources and, in some cases, could have very high interest rates. By consolidating these into one payment, you can simplify the process of managing multiple ongoing payments on different schedules by turning them into one singular payment, potentially saving on interest and fees in the process.
Helpful business loan guides
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