Secure funding for your business without the need to risk your much-needed assets.
When considering finance for your business, there are a few things that are often at the forefront of a business owner’s mind: reducing costs, maximising benefits and minimising risk to the business. With an unsecured business cash loan, you can access a convenient credit option with minimal risk to your business as you do not have to attach an asset as a guarantee. Compare your options and enjoy fast online approval, a quick turn-around time and flexible repayments to suit your cash flow.
NAB QuickBiz Loan Offer
The NAB QuickBiz Loan allows you to borrow up to $50,000 for your business needs. The loan is available for new or existing business needs and features no upfront fee and tax deductible interest repayments. Link your accounting software directly into the application.
- Interest Rate From: 13.85% p.a.
- Interest Rate Type: Fixed
- Application Fee: $0
- Minimum Loan Term: 1 year
- Maximum Loan Term: 2 year
- Minimum Loan Amount: $5,000
- Maximum Loan Amount: $50,000
Business lenders you can compare
What are unsecured cash business loans?
As mentioned, this is a type of finance which does not require you to attach an asset, whether it be a personal or business asset, as security in order to take out the loan. Depending on the lender you select and your average monthly sales, you may be able to access between $1,000 and $1,000,000 and have the loan amount in your account in as little as one business day.
How do they work?
As these loans are unsecured, lenders have stricter guidelines as to what businesses they lend to. For instance, while some lenders may approve secured loans to business owners with a bad credit history, they will not approve the same owner for an unsecured cash advance loan. This is because these loans are more of a risk to the lender.
The loan amount you’re approved for is usually based on your average monthly sales, how long your business has been in operation and the time you have been at your current business address. Due to the nature of these loans, they are usually restricted to established businesses rather than those looking for finance to start a new business.
How to compare unsecured cash business loans
When considering taking out one of these loans, it’s important to compare your options so you opt for the most competitive loan product for you and your business. Here are a few things to keep in mind when comparing:
- Can my business afford it? Before taking out any loan, this should be at the forefront of your decision. Take a look at the costs that will be involved with the particular lender and ask if it will be manageable with your cash flow over the next few months. Only you know your business’ financials and what you will be able to afford.
- How much can I borrow? While lenders will offer a minimum and maximum loan amount—usually between $1,000 and $1,000,000—the loan you are actually approved for will depend on a few different factors. Check to see what they base their loan amount approvals on and if you will be offered the amount you need.
- When will I receive the loan amount? You’ll need to ensure that the lender you choose is able to transfer you the loan amount in the time you need it. Most lenders will be able to have the loan amount in your bank account within a few days, some are able to transfer it within 24 hours.
- What will my repayments be? Business loans tend to be more flexible than personal loans, with repayments able to respond to cash flow fluctuations. Check to see if the lender will set out repayment terms before you apply, as most will structure your repayments on a case-by-case basis depending on your business type, cash flow history and projections, as well as the amount you borrow. Loan terms differ between lenders, but are usually between three months to one year.
- What are the fees and charges? Are there upfront fees you need to pay to establish the loan? What about ongoing fees? These, along with interest charges, can have a huge impact on the cost and affordability of the loan, so make sure to compare and find the most competitive offering from lenders.
- Who is the lender? The lender you borrow from should also form part of your decision. There are some unscrupulous lenders who operate in the online space, so remember to check their reputation, read third-party reviews, or see how easy they are to contact.
How likely is it that I will get a business loan?
There are different types of business loans you can turn to, but in every case you have to meet certain eligibility criteria. These requirements can vary from lender to lender so it’s best that you know your odds before you consider applying. With some lenders, the following criteria may need to be met in order to qualify:
- You are over 18 years old
- You have been in the business for a set minimum duration, which is normally three to six months
- You meet the requirement for minimum average monthly sales, which could be around $50,000 to $60,000
- You have been renting your current business premises for a minimum period of time, and there is a minimum lease period remaining
- Your business accepts credit card payments
- You have the ability to make repayments
- You offer suitable security which will be used if you are unable to pay off the loan.
What can I use for capital?
Starting a new business requires that you have capital in place, simply because any business needs money to get going. You do, after all, have to rent suitable premises, buy or rent equipment and furniture, pay bills, and even pay employees.
One way to seek capital is to get in touch with firms that specialise in raising capital for businesses. When seeking funding through this route it is crucial that you chart out a suitable presentation structure which includes the problem your business addresses as well as your proposed solution, the market for your product or service, information about competitors, and the nitty-gritty surrounding your financials. Keep the above in mind when turning to the different means to collect capital. Some of these means are listed below:
- Get a secured loan using your home or savings
- Seek seed funding through high net-worth individuals
- Think about approaching private equity investors
- Consider merging with a competitor
- Seek crowd-funding
- Dip into your savings
What if I don’t have equity?
You don’t need to have equity to seek a business loan. If you are in this situation, you still have a couple of options available to you:
- Unsecured business loan. An unsecured loan does not require you to provide any security or equity, but you would have to meet some stringent eligibility criteria to qualify. The amount you can apply for depends largely on average monthly sales, how long the business has been in operation, and the time you’ve spent at your current business address.
- Vendor finance. Vendor financing is gaining popularity in Australia. This concept revolves around a seller giving a buyer a certain time period to pay off the entire price of acquisition. In such a scenario, paying the loan off quickly works well for both parties.
Things to be careful of
As with any type of loan, there are a few things to consider before you apply:
- Risk. As this is a type of business finance, you need to keep in mind that you are not only putting yourself at risk, but also your business and any employees you may have. As these loans are unsecured, the lender is unable to repossess any personal or business asset, but they are still able to take you to court should you default on your loan.
- Borrowing more than you can afford. Another thing to watch out for is the loan amount you’re being approved for. Lenders base this amount on your average monthly sales, so if you have averaged $50,000 in monthly sales you may be granted up to and including this amount with some lenders. But what the lender may not anticipate is your business’ future cash flow fluctuations due to seasonal changes in your industry, fluctuations which you should anticipate yourself.
What are the tax implications of a business loan?
Taking out a business loan requires that you understand the tax implications involved. For example, you cannot claim deductions for most capital expenses that you bear when improving, expanding, or replacing a business. This also includes a large portion of expenses you incur before the business gets going.
You can, however, claim deductions on the interest that business loans and overdrafts attract. You can also claim deductions, directly or via depreciation, on expenses that are incurred as a part of generating business income. Examples of such expenses include rent, telephone and internet bills, insurance covers, wages, accounting fees, and business-related subscription fees.
How to apply for an unsecured cash business loan
If you’re interested in applying for an unsecured cash business loan, the first step is comparing your options. Once you’ve found the right loan you can start the application process by clicking ‘Go to Site’.
After confirming your eligibility for a loan, you will also need to provide certain documents with your application. This usually includes:
Identification documents for business owners and any loan applicants
- Bank statements and business financials
- Rental forms for the business premises