Unsecured business loans are fast becoming the first choice for small business owners when it comes to raising business capital. This is because the terms and conditions which come with conventional (secured) lending options can often be very restrictive on a business and its operators.
Unsecured Business Loans don’t require long-term trading history or security and suit new businesses looking to get their feet off the ground, or established businesses looking for short term cash flow or capital to grow.
Benefits typically include:
Loans from $5k to $300k
same day settlement
Loan terms 3 to 24-Months
up to 60 for equipment
Fast 24-Hour Loan Approval
approval outcomes are fast
Minimal docs required
no need for full financials
Secured Versus
Unsecured Business Loans
Unsecured Business Loans
Regardless of the amount you wish to borrow, it’s important you understand the difference between a secured and unsecured loan. A sound understanding of the differences will allow you to make an informed decision when borrowing money for your business.
Secured Loans
Secured loans (typically provided by a bank or large financial institution) require a guarantee be provided as security that your loan will be repaid. Types of collateral often include; Family home, car or boat which is owned outright, or a percentage of ownership within your business.
If you were to fail in your responsibility to repay your loan, the bank or financial institution is then entitled to take ownership of your collateral in order to recoup the loss incurred.
Unsecured Loans
Quite different to your more traditional secured loan, an unsecured loan requires no capital be placed against the amount borrowed. This can make it far easier to secure funds for your business without having to risk valuable personal assets.
Secured Versus
Unsecured Loan Comparison Table
Unsecured Loan Comparison Table
| Unsecured Loans | Secured Loans | |
|---|---|---|
| Loan Term (Length) | Typically 3 – 24 Months | Loans up to 5-years |
| Requirements | ID check (Licence) 3-Months in business Regular cash-flow | ID Check (Licence) 12+ Months in business Full business financials Collateral such as family home or other asset Full business credit check |
| Time to Settlement | Approved and settled in 24-hours | Typically takes 2-3 weeks |
| Finance Amount | $5,000 to $300,000 | No limit |
The top Three Types of
Unsecured Business Loans
Compared
Unsecured Business Loans
Compared
There are so many different unsecured lending options available that you could spend days wading through them all. We have summarised the top three options most businesses opt to use.
Quite different to your more traditional secured loan, an unsecured loan requires no capital be placed against the amount borrowed. This can make it far easier to secure funds for your business without having to risk valuable personal assets.
A slightly more flexible option allowing the customer to redraw funds up to the total credit facility limit provided. This can be great for business with irregular cashflow.
With longer terms available than other unsecured lending options this suits a customer who is looking to purchase a specific piece of equipment.
Unsecured Loan
Comparison Table
Comparison Table
| Loan Type | Benefits & Suitability |
|---|---|
| Unsecured Business Loan | Facility term 3 – 24 months Any business purpose Top-up & early payout options An unsecured business loan is typically repaid over an agreed period (up to 12-months). These types of loans are usually to fund a specific business task, project or for general cash flow. With this type of loan you know exactly what the repayment commitments will be and can budget accordingly. |
| Unsecured Line of Credit | Facility term 12 months (Revolving) Typically used as a cash-flow facility Line of credit with no line fees An unsecured line of credit is perfect for businesses which have irregular cashflow. A line of credit is a flexible form of unsecured finance which only incurs fees on the amount which is drawn upon. |
| Unsecured Equipment & Vehicle Loans | Facility term up to 60-Months (Revolving) Balloon option Can be more affordable due to longer terms Unsecured equipment finance (otherwise known as rent to own) allows a business to rent equipment with the option to purchase at the end of an agreed upon term. This flexibility can allow businesses to secure expensive equipment they require without significant effect on their cash flow. |
How do I apply
for an Unsecured Business Loan?
for an Unsecured Business Loan?
One of the benefits of an unsecured business loans is the application process is generally far quicker than a secured loan through a financial institution.
Determine the amount you wish to borrow
only borrow what you need
Prepare any questions you have for the lender
best to come prepared!
Place your initial application online
you only need the basics
Think about what loan term will suit your needs
up to 60 for equipment
Common Questions
Answered
Answered
- What do I need to qualify for a loan?
To quality for an Unsecured Finance Business Loan you will typically need to have the following:
- A business with 3 or more months trading history.
- Turnover in excess of $5,000 per month
- Regular cash flow (daily, weekly or monthly)
- What do I need to apply?
With unsecured funding the lender typically only needs to identify who you are and find out some basics about your business such as:
- The last 3-months of banks statements for your business
- Some form of identificaiton (Drivers licence)
- How do I know how much I can borrow?
Just like a secured loan, the maximum amount you can borrow is determined by the amount of revenue and cashflow coming through your business. However, to determine capacity generally only a copy of your recent bank statement is required. Unlike secured loans which normally require your last years full financial records.
- How long will it take to apply?
The online application process is normally quick and easy, and should only take about 10 minutes to complete. If you would prefer to talk to someone in person most lenders are going to be able to take your application over the phone.
- When will I know if I have been approved?
The benefit of an unsecured loan is that typically approvals will be provided inside the same business day. This makes unsecured loans a great option for those who require business capital in a hurry.
- What will the interest rate be?
Every business is different and therefore the same loan or rate will not suit every business. As such, the interest rates on unsecured business loans change depending on the health of your business and its cashflow. Once you have submitted an application the financier will asses your business and it’s capacity to repay the loan and provide you with a summary of how much you can borrow, the interest rate on your loan, and a break down of any fees or charges.
- How long is the standard loan term?
Typically unsecured business loans span between three and 24-months. With most business repaying their loans between six and nine months, however, many also like to keep their payments low and spread out their payments over the full twelve month period.
For those wishing to pay off their loans early, often a discount is offered.
- How quickly will I get the money?
This is one of the key benefits of an unsecured business loan. Generally if you apply during business hours and are approved funds can be transferred before the close of that business day.
I Would Like to Get Started
Where do I Apply?
Where do I Apply?
Unsecured Finance Australia are a leading provider of unsecured lending products. As a team we do everything in our power to make the process of securing an unsecured business loan simple. We want nothing more than to see our clients succeed and are proud to provide small business owners with the funds they need to make their dreams a reality.
