It’s a great time to be in small business. Business confidence is at a high and unlike big business, SMEs are experiencing growth at the highest rate in three years. Wages are on the rise and the gender pay gap is decreasing. Is it any wonder you might be considering expanding your small business, taking on new staff or upping your stock levels?
However, all this growth comes at a cost, and it’s very likely you might need to take out a loan to take your business to the next level. Whether you opt to seek finance from a traditional lender like one of the big four banks or consider an alternative lender, will depend upon your circumstances.
Firstly, it’s important to understand the distinction between the two types of loans. A secured loan is backed by collateral – such as your home or personal property – whilst an unsecured business loan does not require collateral. In the case of unsecured finance, typically the lender will look at a business’s financials in order to ascertain its capability of servicing a loan. For a small business, the ability to acquire finance without having to put up the family home as collateral can be very attractive. If your business should go belly up, you’re secure in the fact your personal assets will not be affected.
However, this is not the only motivator for the increasing popularity of unsecured loans. Here are three more reasons why you might consider an alternative lender and an unsecured loan.
Faster approval rates
Borrowing money from a traditional lender can take considerable time. The application process is lengthy, and the amount of information and supporting documentation you need to provide can be enormous. Thanks to advances in fintech, non-bank lender applications can be done quickly and easily online. Oftentimes applications can be completed and approved funds received, on the same day.
There are fewer hoops to jump through with an unsecured loan. As long as you are a registered Australian business with a minimum turnover of $50,000 and have been in operation for six months or longer, most alternative lenders will consider an application for finance from you and your business.
Unsecured business loans come in a variety of forms: from flexible business loans to lines of credit to assist with cash flow to loans for equipment and finance. Loans can be for short terms (as little as three months) to longer terms (up to 60 months for equipment and finance). Loans are tailored to suit your need and top up or early payout options are often possible.
Often accessing capital can be the difference between business growth and business failure. With this in mind, an unsecured loan may provide the opportunity to grow your business without the risk to your assets or property
Unsecured Finance Australia provide unsecured loans from $5k to $300k. They offer affordable payment options and high approval rates. A typical loan application will take just 10 minutes. Find out more about how Unsecured Finance Australia could help your business grow.
 Xero Small Business Insights report 2018