Lending solutions are becoming easier to find, especially since they’re now available online.
You might also wonder, “How do these small business loans online work?”
Fortunately, these are some of the easiest ways to get a loan quickly.
Here’s everything you need to know about applying for and securing small business loans online.
Securing Small Business Loans Online: A Guide
The application process for these fast business loans is one of the best ways to gain quick access to funding for your business.
You won’t need to wait weeks for approval. Business owners can usually gain access to their funds within hours or the same work day of their application.
If you find the right lender, you can expect them to be completely transparent about everything and avoid hidden fees that can shock you.
Here’s a quick guide on securing small business loans online.
Step 1. Apply Online
Send an online application to your lender and submit the necessary documents upon completion. Requirements can vary depending on your business lending provider.
The lender can conduct a credit check or ask for additional documents to ensure you can repay the loan and fees.
Once you get approval, you may have to register your bank account to access all funds through online banking.
Step 2. Secure Your Loan Approval
Once they’ve reviewed your loan application, you will get the appropriate business loan offer based on the loan’s purpose and the amount you can repay.
Larger loans are usually reserved for those with a higher credit score or who can prove they can make the repayments.
This is also the best time to inquire regarding any fees that can affect your repayment so that you won’t be surprised by any changes along the way.
You can usually get your approval and funding within the same business day, making it easier to access than other finance options.
Step 3. Withdraw Your Money
Once your application is approved, you can usually withdraw the cash on the same day.
Take note of your monthly fees and pay on time to get better loan options and deals in the future.
Try to stick to your repayment schedule to prevent additional fees at a higher interest rate.
What are Small Business Loans?
This type of business loan usually provides business finance assistance to small businesses.
They tend to have shorter loan terms than a bank loan since they’re supposed to be a quick fix for your business’s financial needs.
Since they’re not credit products and usually don’t require asset security up to a set amount, lenders tend to charge higher interest rates and other additional fees for more secured lending.
A business loan is also more flexible regarding its loan term or additional repayments.
Types of Small Business Loans
There are many ways to borrow money depending on your business plan and current situation.
You might wonder, “Which type of loan should I apply for?”
These are the most common business financing options that could help your business grow:
- Unsecured Business Loans: When you apply for an unsecured business loan, you don’t need collateral to obtain it. They usually base your terms and amount on your business’s creditworthiness. Obtaining unsecured business loans is usually straightforward and can get you funding within hours.
- Short-Term Loans: These can be secure or unsecured loans with shorter payment terms and lower borrowing capacity. Payment periods usually range from three to 12 months with loans of approx. A$5,000 to A$150,000.
- Business Line of Credit: Often compared to credit cards, these loans provide a lump sum you can borrow from. You will need to pay interest and the amount you’ve spent.
- Equipment Finance: These loans are designed to help businesses upgrade their equipment to stay at the top of the industry.
- Invoice Finance: This loan option provides funding based on your accounts receivable. It allows you to secure cash quickly and repay using money coming into the business.
Note that loan offers and terms can vary depending on the business loan you are applying for.
Components of a Small Business Loan
These business loans are easily distinguishable from other types by their components.
These are the five components you need to be aware of when applying:
- Principal: The total amount you’re borrowing
- Term: The length of your loan
- Interest Rate: The rate at which you need to repay your loan to the lender
- Fees or Charges: Additional charges from your lender for the processing of your loan or maintaining your account
- Repayment Frequency: How often you need to repay (daily, weekly, or monthly)
Considerations and Requirements When Applying for Small Business Loans Online
Before you can apply for loans online, you’d need to prepare a few documents to ensure you qualify. These are the typical considerations and requirements:
- Minimum of six months in the business with a gross annual turnover of AT LEAST A$50,000
- Active ABN OR ACN
- Minimum of A$5,000 monthly revenue
Requirements can vary per lender, and they can ask for additional documents when necessary.
Most lenders also don’t have early repayment fees, so you don’t have to worry about getting charged for early repayments.
Benefits of Securing Small Business Loans Online
Businesses prefer these loans for many reasons, especially with how convenient they are.
These are the most common benefits of applying for small business loans online.
Better Cash Flow Management
You can keep your business’s cash flow consistent with these loans, especially during seasonal slumps and slow days.
This ensures that everything related to your business remains constantly funded.
Funding Your Operating Costs
Business owners constantly worry about the bills they must pay to keep their ventures going.
Get constant access to funds for these costs, which include paying your staff, utilities, and other bills.
Keep your business on top of your industry by updating it with the latest tools and equipment.
You can also use it to purchase inventory and prepare your business for growth.
You may have a few more questions on small business loans online.
We’ve gathered the most common ones to help you with your research.
Do I Need to Provide My Purpose for Loan to Get an Approval?
Business leaders aren’t licensed to provide consumer credit.
They have some security required to ensure that the funds you’re borrowing are for business purposes ONLY and not for personal gains.
How Do I Know if I’m Eligible for a Small Business Loan?
Qualifying for a small business loan is usually easier than gaining secured business loans from traditional banks.
You need proof that you can repay your loan and meet their general eligibility & credit criteria.
Even with a less-than-perfect credit score, many lenders can still provide those small businesses with outstanding loans.
Thanks to online lenders, applying for loans is now much easier.
Find the best one for your business and maximise its opportunities.