You’re Not Alone: Alternative Lending Options for Your Small Business

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Table of Contents

• Seize Business Opportunities
• Unappealing Options Abound
• There is Another Way
• How Does an Unsecured Small Business Loan Work?
• A Blessing in Disguise

Are you looking to grow your business? If you’re seeking funding to take on another employee, or develop some new technology and are frustrated by the slow pace of bigger banks evaluating your loan application – you are not alone. A large group of small business owners in Australia are frustrated by the difficulty of accessing a business loan, and more and more are turning to alternative lending options for a fast, simple solution.

Seize Business Opportunities

There are over two million small business owners in Australia and at any time, 40% are looking for finance to grow their business. Common uses include:

• Purchasing inventory
• Building a new website
• Hiring more staff
• Renovating or expanding premises
• Purchasing or upgrading equipment
• Bridging receivable gaps; or
• Paying ATO tax portal debt (some parameters apply).

Unappealing Options Abound

Borrowing from family and friends comes with the inherent risk of damaging personal relationships. Crowd-sourcing doesn’t suit every type of business and can be an administrative nightmare. Using your credit card means paying high-interest rates, not having a clear idea of the cost, plus compounding interest and not always being able to access sufficient money. The big banks almost always require property security for a loan, and this is usually not an option for business owners without a family home or who are unwilling to ‘risk the house’.

There is Another Way

Unsecured business loans are a genuine alternative for small and medium-sized businesses. Instead of standing in queues, completing endless paperwork and waiting 2-6 weeks for a decision, you can use an alternative lending option. Simply complete your application online in a few minutes, get a fast decision and have the funds in your bank account typically within 24 hours. There is no cost to apply and no obligation to proceed.

How Does an Unsecured Small Business Loan Work?

An unsecured small business loan usually works on a fixed term of between 3 and 12 months and suits businesses with regular income (daily/weekly). Online lenders like Prospa use a proprietary small business lending platform to evaluate the strength of your business and determine creditworthiness, enabling them to provide an answer in as little as one hour. No security is required, but you do need an income of more than $5,000 per month and 6-12 months of trading history.

If you are seeking a loan under $50,000, you will only need photo identification and three months of bank statements. For loans over $50,000, you will also need to provide account receivables, payables and other basic financials. Unlike other loans, unsecured small business loans don’t use annual interest rates because the loan terms are usually less than 12 months. Instead, a factor rate is applied depending on credit quality. Payments are cash flow friendly and customised to suit your business.

A Blessing in Disguise

Don’t stay frustrated while you miss opportunities to grow, or settle for a less than perfect option. You can get the working capital your business needs, and an alternative finance partner like Prospa will be faster, a much better fit, and understand your business better than a bank will ever be able to. Questions? Get in touch with us on 1300 882 867.

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