In an ideal world, passion is enough to get a business up and running in Australia. Unfortunately, that is not the case in reality since sufficient funding is crucial when entering the world of business. For instance, even a skilled chef who is interested in opening a restaurant should be able to afford all the startup costs, like licenses, kitchen equipment, and furniture. This is why obtaining a business loan as a form of startup funding is important.
How Is a Business Loan Different from a Commercial Loan?
Commercial loans and business loans are used interchangeably, but they have some slight differences. The former usually refers to a mortgage on commercial real estate. This type of loan is used when seeking commercial property in which the business will be run.
On the other hand, business loans may be taken out to cover expenses associated with running a business. These include leases on establishments or equipment, advertising, employee wages, and business transportation.
Business owners may need either or both of these types of loans. To determine the right option, hiring a business finance broker can be helpful.
How to Get a Small Business Loan in Australia
Hiring an experienced business finance broker is necessary before obtaining a business loan. This professional provides access to lenders and suggests the right one, depending on the business owner’s circumstances, needs, goals, and appetite. They will also guide business owners throughout the loan application process and increase the chances of getting the application approved. As a result, business owners can save time and money.
When choosing a business broker, do thorough research to find one who can offer a customized finance solution. Understand how they have helped previous clients by reading client testimonials on their website or social media pages.
Can Business Owners with Bad Credit Secure a Business Loan?
Business owners with bad credit can still have their loan applications get approved by lenders. However, they need to be ready to be subjected to higher interest rates. They will also need to prepare collateral to secure the business loan. Since they are considered a riskier borrower, they need to present a good case.
The good news is that business owners can seek specialty lenders as long as they prove that their financial situation has improved. This may involve showing a record of consistent business revenue. Borrowers who are just starting out may present a similar history of earnings in the same industry.
In short, borrowers with bad credit histories have to show their lenders that they are a risk worth taking. Having a record of earnings suggests that repayment issues are unlikely to happen again.
What Are the Alternatives for Business Loans?
Securing a business loan is possible, but many applications often get rejected. Thankfully, there are other alternative business funding options that business owners can take advantage of. To get started choosing the right one, partner with a business financing provider who will connect you with the most suitable lender.
Conclusion
Applying for a business loan can be a time-consuming process. This is because every lender has unique products and application criteria. Instead of wasting time comparing different lenders on your own, find out which lender is the right one for you with our help.
Our business financing providers at Wealthy You will connect you with alternative lenders for small businesses. Whether you are starting out or scaling your business, you can depend on us to help you secure the funding you need. Contact us today at (02) 7900 3288!
