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Guide to loans for stagnant businesses

Has your business growth plateaued? There are financing options you can consider.

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.

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.

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 typeLoan amountHow it worksWhat to consider
Line of credit$10,000–$1,000,000Repay 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–$500,000Make 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–$100,000,000Make the minimum monthly repayments of any balance that you use
  • Only pay for the funds you use
  • Conveniently attached to your business account
Invoice financing80% of the invoice amountPay 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

Name Product Min. Loan Amount Max. Loan Amount Loan Term Upfront Fee Filter Values
ebroker Business Loan
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.
Max Funding Unsecured Business Loan
1 month to 1 year
$0 application fee
An unsecured business loan from $3,000 that offers convenient pre-approval and no early repayment fees.
Lumi Unsecured Business Loan
3 months to 3 years
2.5% establishment fee
Apply for up to $300,000 from Lumi and benefit from short loan terms, no early repayment fees and once approved receive your funds in just one business day.
Valiant Finance Business Loan Broker
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.
Prospa Business Loan
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.
Name Product Min. Loan Amount Max. Loan Amount Loan Term Upfront Fee Filter Values
ScotPac Invoice Finance
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.
ScotPac Selective Invoice Finance
1 to 3 months
Finance your unpaid invoices on demand with terms of 1 - 3 months. 95% of invoice is paid upfront, with no minimum trading history required.

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 lenderMinimum revenueOther criteriaFind 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
Bigstone$250,000 per year
  • Have been operating for at least 9 months
  • Be an Australian company/trustee
  • Have more than 1 employee
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
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
GetCapital$10,000 per month
  • Have been operating for at least nine months
  • The loan needs to be 100% for business purposes
Kikka$10,000 per month
  • Have been operating for at least one year
  • Have an ABN/ACN
NABNo 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
Max FundingNo 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
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
MiFanance$400 per week (personal income)
  • Have an ABN
  • Not receive over 50% of your income from Centrelink
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
OnDeck$100,000 per year
  • Have been operating for at least one year
  • Be operating in one of OnDeck's approved industries
ProspaNo minimum
  • Have three months of business bank statements
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
ThinCatsNo minimum
  • Have industry-experienced directors with a strong net tangible asset position

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.

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