Wondering what unsecured loan means?
Are you in need of quick money but don’t want to put up your assets (if you have any) for collateral? Well, we may be able to help with unsecured business loans.
Whether you need funds for general working capital, ATO debts, expansion, renovations, stock purchases or simply catching up on overdue expenses, unsecured business loans could be the right option for your business.
What are unsecured business loans?
Unsecured business loans allow you to borrow against the cash flow of the business, making it a good option for businesses that provide a profitable service and do not require any equipment or other assets.
An unsecured business loan comes in two forms:
- A traditional loan with a specified term
- A fixed interest rate; or as a line of credit with a variable interest rate
We offer unsecured business loans for new businesses that are just starting up and have not had the time to build up the cashflow and assets to be used as collateral against the loan. If you’re starting out as an entrepreneur and company owner and are unable or uninterested in lending from private investors, unsecured business loans specifically made for a new business might be the right-fit for you. Such loans do tend to pose extra risks for the lender, however, and usually come with a higher interest rate.
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How do unsecured business loans work?
If the current working cash flow in your business is not sufficient to meet your expenses as they arise, the introduction of additional funds can provide your business with a needed boost to get through those tight periods. Unsecured business loans can be mobilised quickly, sometimes in as little as 24 hours, and will allow you to pay off expenses and invoices and keep your business ticking along.
There are four main types of unsecured business loans:
In a term loan, a lump sum amount is transferred to you upfront and repayments are made according to a predetermined scheduling which can range from three months to 15 years or more.
Short term loans
Short term loans have shorter repayment schedules than term loans. The repayment term will depend on your lender, but the terms generally range anywhere from three months to a year. While the interest rates may be higher for short term loans, they are repaid within a shorter period.
An overdraft acts as a line of credit linked to your primary business account. Having the ability to overdraw your account can be convenient in managing daily monetary fluctuations in your business especially if you run a business that relies on clients paying invoices, among other specifics.
Lines of credit
A line of credit differs from an overdraft as it is linked to your lender, not to your primary business account. As you repay the funds you have borrowed, you regain access to them. This allows you to withdraw as much money as you need up to a certain limit and then you can repay the money as it becomes available, as you would with a credit card.
Why talk to us?
With our experience collaborating with business owners from all kinds of industry niches, we understand that every business is unique and work hard to find a loan or funding option that works for it, not against it – that is what we call working smarter! We understand that while all small businesses are different, they have one thing in common – and that is looking for partners they can trust. At the end of the day, we are all after the same dreams, right?
Whether you are looking for unsecured business loans for a new business or in need of funds to boost an existing one, we will work with you to find the best finance deal for you and your business.