Venturing into the business world is not easy, especially if you have no idea where to get the capital or financing you need. Fortunately, there are available business loans you can have in Australia.
If you’re planning to start a business or looking to expand your own, here are the different types of business loans you can apply for to help fund the needs of your venture:
1. Unsecured Business Loan
This type of business loan doesn’t need to have collateral in place. Whatever business you have or will undertake, you can apply for an unsecured loan. While its name says it’s unsecured, it doesn’t necessarily mean that it’s not safe; it just means that you don’t have to put any assets on the line just to get approved on your loan application.
You can use an unsecured business loan for any purpose, whether it’s for buying stock, paying for overhead costs, or boosting your day-to-day cash flow.
2. Secured Business Loan
Contrary to an unsecured business loan, a secured business loan must have collateral in place. However, this type of loan allows you to borrow larger loan sizes and offer much longer loan terms than unsecured loans. Given this, you can scale your business more since you can meet the funding demands of your company.
Since you can borrow large amounts of money, you need to put some of your assets on the line so that lenders will have something to hold on to if you don’t pay up your loan. Most lenders accept a family home or a company car as collateral. So if you don’t want to lose your assets permanently, make sure you follow your repayment plans.
3. Equipment Loan
If you have a business that requires equipment to function, you can apply for an equipment loan to finance your equipment. You can also use this to repair or lease equipment. But, make sure to note that equipment loans can only be used for equipment, not on any other purchases for your business. It also needs collateral, but the collateral for this is usually equipment, not an asset.
4. Line of Credit
A line of credit works like a credit card. You can only use it if you need it by withdrawing the loan amount that you only need. The good thing about this loan type is that you don’t have to pay any interest rate for the untouched funds, helping lower your overall loan costs.
5. Buy Now, Pay Later
Buy now, pay later usually have zero interest rates and fast approval times. This type of business loan is becoming popular, especially for young entrepreneurs, since it can be used for everyday expenses, such as office supplies or social media ads. If you apply for this type of loan, you can pay it back in instalments.
Don’t let the lack of funds stop you from growing your business. Since money is a significant factor for any business operations, you can choose among these different business loans to help you manage your business more efficiently and effectively. However, make sure to shop around and weigh up your options when it comes to your lender, as they can affect how much your loan can cost you.
If you need a loan for your business in Sydney, Wealthy You can provide you with alternative business loans! We can help you navigate the lending process and deliver results with great options and competitive rates so that you can get the financing you need for your business quickly. Apply for a business loan with us today!