Guide to loans for stagnant businesses

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Business borrowing guide stage 5

With the discourse centring on innovation and entrepreneurship, it can be easy to be lulled into a false sense of security that continued business growth is inevitable. However, businesses of all sizes can go through stages where profits level out, and you may need financing to kick your business back into gear. This is the guide to read if your business is in that stage.

In this guide...

Business Guide 5:

How to compare business loans
Will my business be eligible?
Answers to common questions

When is a business stagnant?

This is essentially when business growth plateaus. This may be due to an ongoing reduction in profit, to revenue slipping at a time of year when it should be increasing, or it becoming necessary to cut back in areas, such as marketing, which the business has not had a problem covering in the past.

Not the stage your business is at? Explore other options:

Startups

High-growth businesses

Established businesses

Stagnant businesses

Businesses in decline

Funding needs that are common for stagnant businesses

Stagnant businesses can be in any industry and can be of any size, making their funding needs varied:

Marketing. Due to decreased or plateaued profits, you may have cut back on your marketing budget. This is not the time to be cutting back, but it's sometimes a necessity. You may be looking for funding to be able to pay for this and generate new revenue for the business.
Human resources. There are several reasons a business may become stagnant, but this position may lead to failings in human resources, which impact the customer. By investing in your staff for customer service or product development, or hiring additional staff to assist with growth, you may be able to help your business expand.
Product or service redesign. Some businesses have a successful product or service at first, but they fall into stagnation due to lack of development or innovation. By seeking finance to expand your product line, re-innovate it or even just do market research, you can assist your business.
Hire outside help. It can be difficult to diagnose business issues if you're entrenched in the business's practices, which can make hiring outside expertise a good investment. You may opt for organisational experts, designers for marketing or website help or a PR agency that can drum up some interest in your business.

What types of finance are available?

Loan type	Loan amount	How it works	What to consider
Line of credit	$10,000–$1,000,000	Repay only what you use of the credit line, plus fees and interest	Flexible and based on your funding needs Generous loan terms (usually up to 25 years)
Term loan	$10,000–$500,000	Make regular repayments over a set term, calculated at a fixed or variable rate	You must know how much you need to borrow May be difficult to top up your loan if needed
Business overdraft	$10,000–$100,000,000	Make the minimum monthly repayments of any balance that you use	Only pay for the funds you use Conveniently attached to your business account
Invoice financing	80% of the invoice amount	Pay fees to bring your outstanding invoices forward	Improve cash flow by bringing invoice payments forward If you become reliant on timely invoice payments, you may need to keep using the finance

Compare business loan options

Business loans
Invoice financing

1 - 4 of 4

Name	Min. Loan Amount	Max. Loan Amount	Loan Term	Upfront Fee
ebroker Business Loan	$5,000	$5,000,000	1 month to 30 years	$0 application fee	Small business loans available between $5,000 and $5,000,000. Get access to 70+ non-bank lenders on this independent platform.	Enquire now Compare	loading Fetching your data...
Lumi Unsecured Business Loan	$5,000	$500,000	3 months to 5 years	2.5% establishment fee	Apply for up to $500,000 from Lumi and benefit from short loan terms, no early repayment fees and once approved receive your funds in just one business day.	Go to site More Info Compare	loading Fetching your data...
Valiant Finance Business Loan Broker	$5,000	$20,000,000	3 months to 7 years	$0 application fee	A Business Lending Specialist from Valiant Finance can give you access to competitive business loans from over 80 lenders. Loans between $5,000 and $20 million are available. Request a call – your loan can be funded in 1 business day.	Enquire now Compare	loading Fetching your data...
Prospa Business Loan	$5,000	$500,000	3 months to 3 years	3.5% origination fee	Small business loans are available from $5,000 - $500,000 on terms of up to 3 years. At least six months trading history and a monthly turnover from $5,000 is necessary.	Go to site More Info Compare	loading Fetching your data...

1 - 2 of 2

Name	Product	Min. Loan Amount	Max. Loan Amount	Loan Term	Upfront Fee	Filter Values
ScotPac Invoice Finance		$10,000	$150,000,000	From 1 year	No set amount		Improve your business cash flow by financing your outstanding invoices. No minimum trading history required, but minimum 12 - month term and $10,000 in invoices.	Go to site More Info Compare	loading Fetching your data...
ScotPac Selective Invoice Finance		$10,000	$1,000,000	1 to 3 months	$500		Finance your unpaid invoices on demand with terms of 1 - 3 months. 95% of invoice is paid upfront, with no minimum trading history required.	Go to site More Info Compare	loading Fetching your data...

Useful guides for stagnant businesses

How to compare your business loan options

If you're unsure what loan you should opt for, here's how you can compare business loans:

Loan amount. You will have a general idea of how much your business needs to borrow, so make sure the lender offers this. Business lenders usually have minimum and maximum amounts available, and if you're taking out a secured loan, it will depend on how much your security is worth.
Interest rates. Lenders will charge a fixed or variable rate, or a factor rate, which is calculated differently. Check what type of interest rate will be charged and how high it is to get an idea of how competitive the loan is. Remember, the comparison rate will show you a representation of the interest rate plus fees.
Fees. You can be charged a whole range of fees with business loans. These can include upfront fees such as establishment and application fees, or ongoing fees such as monthly or annual fees. Late fees and default fees will also apply.
Turnaround time. How soon do you need the funds? Alternative lenders can give you your money in 24–48 hours, but more traditional lenders may take longer. Be sure to check that the turnaround time meets your needs before you apply.
Flexibility. As your business is stagnant, you may need a more flexible loan than what is offered. For instance, can you borrow more funds easily if you need to? Are you able to repay the loan early without penalty, or make additional repayments? Verify the flexibility of the loan before you apply.

How much does my business need to be making to be eligible?

Business lender	Minimum revenue	Other criteria	Find out more
Banjo Loans	$500,000 per year	Have been operating for at least two years Be a registered Australian business or Australian citizen/permanent resident Director's credit scores need to be over 510	More
Bigstone	$250,000 per year	Have been operating for at least 9 months Be an Australian company/trustee Have more than 1 employee	More
Business Fuel Loans	$10,000 per month	Have been operating for at least one year Have 12 months left on your lease and up-to-date rent Have been residing in the same location for one year	More
Capify	$10,000 per month	Have been operating for at least three months Be an Australian registered business, sole trader, contractor, company, trust or partnership Have fair credit	More
GetCapital	$10,000 per month	Have been operating for at least nine months The loan needs to be 100% for business purposes	More
Kikka	$10,000 per month	Have been operating for at least one year Have an ABN/ACN	More
NAB	No minimum	Have been operating for at least 12 months Have a valid ABN Be a sole trader, part of a partnership with up to two partners or part of a company with up to two directors Be an Australian citizen/permanent resident	More
Max Funding	No minimum	Own vehicle or real estate for security If you don't have security, you need to earn $6,000 per month and have relatively good credit	More
Merchant Cash	$5,000 per month	Have been operating for at least one year Have a property or vehicle as security if you want to borrow for longer than 12 months	More
MiFanance	$400 per week (personal income)	Have an ABN Not receive over 50% of your income from Centrelink	More
Moula	$5,000 per month	Have been operating for at least one year Have an ABN or ACN Have a fair or better credit history	More
OnDeck	$100,000 per year	Have been operating for at least one year Be operating in one of OnDeck's approved industries	More
Prospa	No minimum	Have three months of business bank statements	More
Spotcap	$100,000 per year	Have been operating for at least one year Have an Australian online bank account Be an Australian registered business Have financials for the last two years	More
ThinCats	No minimum	Have industry-experienced directors with a strong net tangible asset position	More

Answers to questions you might still have

How can I grow my business profits?

There is no easy answer to this as it depends on your business size, industry and the product/service you're offering. You need to start by analysing your business's position and seeing what has changed, or not changed, to cause your profits to plateau. You can also enlist some outside help and expertise to diagnose your business problems and help your profits grow.

What type of loan should I opt for?

Again, there's no one answer. Some loans offer more flexibility with the loan amount, for example overdrafts and lines of credit let you borrow up to and including a credit limit, while term loans give you a lump sum that you need to repay. Decide what you need out of the finance and then pick the loan type that suits you best.

How can I check my business's credit position?

You can order a copy of your credit file from a credit reporting bureau or check your business credit score by following the link on this page.

I have an asset but am unsure whether or not to use it as security. Which is better?

Either might be better for your business. If you have confidence in repaying the loan then offering security will give you more loan options, but it is a more complicated process and you will lose the asset if you fail to repay. Keep this point in mind and compare secured and unsecured loans to see the differences in cost, then you can make a more informed decision.

I'm not sure if I can afford a business loan. Should I still apply?

If you fail to repay a business loan it will affect your credit history and ability to borrow money in the future. Late fees and enforcement expenses may also put your business in the red. You need to carefully consider whether a business loan is right for your current position, and you can start by determining the repayments for the loan and see if it is manageable with your cash flow.

Thank you for your feedback!

Written by

Elizabeth Barry

Lead Editor

Elizabeth Barry was the lead editor for Finder. She has over 10 years' experience writing about a range of topics with a focus on personal finance. You’ll find her writing and commentary in a range of publications and media including Seven News, the ABC, MSN, the Irish Times and Singapore Business Review. See full bio

Elizabeth's expertise

Elizabeth has written 247 Finder guides across topics including:

Banking
Personal finance
Investing

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