The world of Small Business Lending has changed dramatically over the past 5 years with the introduction of Alternative Financiers into the Australian financial landscape.
These financiers have challenged the big bank’s way of thinking about how a small business loan needs to be assessed, what information is required, how they want to receive the information and how quickly it is transacted.
Quick, fast and simple are a few of the words used to describe some of these Alternative Financiers and let’s face it, that works well for SMEs. The introduction of these new small business unsecured business loan products has made gaining access to working capital to grow your business a breeze. In the past 12 months, some of the Alternative Lenders have increased their loans out the door by over 450%. Yes, that’s right, 450% growth in business lending alone.
Here are a few reasons why more and more business owners are speaking with their trusted Finance Broker about an Unsecured Business Loan to help grow their business.
Applying for a traditional secured bank loan can be a very complex process. Sometimes the bank will ask for the preparation of detailed business plans and strategy documents, plus the provision of full financial statements and extensive other supporting documents. This process can be costly to prepare these documents plus also costly from a time perspective, especially if you are trying to capitalise on an opportunity and need the funds now.
With the right know-how, you could gain access to an Unsecured Business Loan application that can often be made online in a few simple steps. You can link your business data online for assessment, for example digital bank statements, Profit and Loss and Balance sheet from your online accounting system. This quick online process keeps things simple for the Finance Broker and the business owner, another bonus is you are dealing with real time data, so the decision on your loan can be made quickly and with confidence by the financier. That’s a win, win for everyone.
Very few businesses meet the stringent lending demands of the major banks, who generally require two to three year’s trading history, a consistent high minimum turnover and personal or commercial security for the loan.
On the other hand, some Alternative Lenders will offer to lend to businesses that cannot offer any security and that have a few issues sitting on their credit file from previous finance but are on the right track again now.
Unsecured Business Loans generally carry a higher interest rate than a traditional secured loan due to the higher risk for the lender. For you as the business owner decision is simple. Does the opportunity that you will be able to secure outweigh the costs of the finance to execute the deal?
Convenience and flexibility is a key part to making your small business loan work for you. Did you know that there are Alternative Lenders that offer no set up costs, no ongoing fees and no early payout fees? Some will also allow you to match the amount you borrow, your interest preferences (fixed, variable or combination) and your repayment terms to your specific business needs.
For example, if you own a seasonal business, you may be able to negotiate a repayment schedule that allows you to make additional repayments during your busy periods, but then reduce the amount you are required to repay when your turnover is lower. Pretty exciting stuff for a small business on the move!
A seasoned Finance Broker will be able to guide you through the maze of opportunity that exists within the Alternative Lenders marketplace today. This added competition means that with the right guidance from a trusted professional, it is now easier find a lending partner that is willing to work with you and your specific business needs both now and into the future.
While major banks can take weeks or even months to assess a loan application, Alternative Lenders that are offering Unsecured Business Loans are usually assessed the same day, with you being offered a transparent loan offer for you to consider upfront.
If you decide to move ahead with the unsecured business loan offer, you could have funds in your account within one business day. This has become a very popular option for businesses that need a fast cash injection to cover working capital shortfalls, or to pursue an exciting, time-limited growth opportunity.
Many business owners simply don’t want to offer up their personal security, nor do they always have the necessary assets to offer as collateral for a secured loan.
Some business owners may have the option to use personal property such as their family home as security, but this can be an extremely risky strategy if your business sails into troubled waters. If you have given up this security to the bank, you could end up losing both your home and your livelihood at the same time. At the end of the day, why give up your personal security if you don’t have to?
Fox Finance Group is one of Australia’s leading personalised financial service organisations. We have spent many years getting things right so that you can rest assured that you are getting the very best financial advice available on the market today. We work for you, not the banks, plus we can have a loan pre-approved ready to go the same day!
As a Fox Finance Group Client, you have access to your very own Unsecured Business Loan Specialist along with access to your very own Qualified Financial Planner. Our team comprises of specialists with many years’ experience in Secured and Unsecured Business Loans, Equipment Funding, Cashflow Funding, Invoice Funding and more. Yes, we have a large team here at Fox Finance Group ready to help you.
We pride ourselves on the unique personalised service that we provide our Clients. Your Business Loan Specialist can help you either over the phone, via email, at your home or at your business. You get their direct email address and mobile number, which makes it easy for you to stay in contact with them when you have questions.
If you are keen to learn more or you are ready to take action, you can contact us on 1300 665 906 or you can get started here.
After graduating year 12, Dan began his banking and finance career at Westpac Banking Corporation in Brisbane in 1988. He worked for the bank for seven years, excelling in his career and working his way up to management.