Unsecured business loan

A majority of small businesses in Australia are traders who purchase goods and sell to their customers. The sales of small businesses depend to a large extent on the variety of items they keep in stock, if the business does not have sufficient inventory, the customer cannot purchase it. However, every small business has to pay a large number of expenses, like rent, salaries, utilities, business expenses. This leaves the business owner with less money to purchase the stock or inventory he will require for growth or expansion. One way the business owner can get the funds required is by taking a business loan.

 

However, most banks and conventional large lenders will not give a loan to a small business without collateral like property, inventory, or another asset. So it is advisable for the business owner to take a business loan that is unsecured. Business owners who have not taken unsecured small business loans Australia earlier may ask what is an unsecured small business loan, how does it differ from a secured loan, and how to get approval for the unsecured loan. The main advantage of taking an unsecured loan is that the business owner does not have to provide any collateral to the lender.

 

There are a large number of small businesses and startups that do not have assets like property or inventory which they can use as collateral. However, like all businesses, they require funds for growth. Since the banks are likely to reject loan applications without collateral applying for a bank loan is a waste of time. Even if the business has some assets, the procedure for applying for a bank loan will be time consuming, since the bank will first assess the value of the assets, to determine the amount of loan the business is eligible for. There is also a possibility that the asset will be seized if the loan is not repaid in time.

Realizing that there are a large number of small businesses that are able to repay loans but cannot offer the collateral which banks require, online lenders like Apickle are offering unsecured loans for small and medium sized businesses (SMBs) in Australia. To be considered for the business loan, the lender will check the cash flow of the borrower, the monthly sales. Typically the SMB should have been trading for a period of at least six months and should have monthly credit and debit card sales of at least $ 10000. The SMB can apply for the loan online, and if approved, the loan will be usually disbursed within 24 hours on weekdays.

 

Though there are many advantages of getting an unsecured loan, the borrower should be also aware of the limitations. Usually, the loan amount will be less, the lenders will give loans of a maximum amount of $ 90000 only. The interest rate for the unsecured loan is also higher compared to secured loans. Though the lender cannot seize the assets of the borrower in case of loan default, the SMB should be aware that their credit rating will be adversely affected if they do not repay the loan on time.