Apply for a Business Loan

Your X Inc Finance broker will take you through everything you need to do to apply for a business loan, but along with your accounts, you should consider your business plan, resume and credit history.

Business Plan & Professional Resume

You will need to provide your business plan and (key person) professional resume. Many, if not all, lenders will require your business plan. The competence and credibility of the management team also plays an extremely important role. Your X Inc. Finance broker can help you with both these documents.

Credit History & Collateral

Before applying for a business loan, you should also know your credit history. If you have any issues on your credit report, it is important that you do whatever is necessary in order to clear these up. It is easy to get a copy and costs very little to access. You can get it at www.mycreditfile.com.au.

Depending on how much money you're looking to borrow and what your credit history looks like (or the credit history of your business), you may need collateral or security in order to obtain a business loan. For startup businesses collateral could be personal real estate or other valuable property. For established businesses, collateral could be accounts receivable, business real estate or business equipment, inventory and supplies.

Your X Inc Finance broker can help you determine whether or not collateral will be necessary for your individual circumstances and help you check your credit history.

Business Loan Eligibility

If you want to get an indication of your business loan eligibility, click here.

Business finance notes

Collateral: Whether or not you will need collateral in order to obtain a business loan will depend on a number of factors which may include how much money you are applying for, what type of business loan you are applying for and what your credit history is like. Whether you are starting a business from scratch, buying an established business or borrowing funds for a business you are already operating these and other items may also play a factor in whether or not you will need collateral for your business loan.

Loan Term: Each lender has its own repayment terms and how long you have to pay your loan back will depend on your lender's terms and how much money you are borrowing. Usually loan repayment terms are from two to five years, but some can go as long as ten years if you are borrowing a considerable amount of money. (If it's a business loan on residential security it can go 30 years)

Fixed or Variable Interest: Whether your business loan has a fixed interest rate or a variable interest rate will depend on the specific loan that you apply for. Business loans come with both fixed and variable interest rates. Variable rates may offer a lower initial interest rate than a fixed-rate business loan, but you need to consider that your interest rate could rise at some point during the term of the loan.

Using a Broker: Especially with business loans, using a broker is always a better bet as brokers can explain to you your different options and can often find you a better interest rate than you could get yourself. There is also the professional advantage of having someone negotiate every part of the loan on your behalf.

Impaired or bad credit history: Whether or not you can get a business loan with blemishes on your credit history will depend on your individual circumstances. Exactly how bad your credit history is, what it is that is negatively impacting your credit and whether or not you have collateral to put up against the loan are all factors that will determine whether or not you can qualify for a business loan.

Length of time in business to qualify: There is no set time that you must be in business in order to qualify for a business loan. Some business start-ups are able to get the funds they need while companies that have been in business for ten years may find themselves having a hard time getting the loan they apply for. Whether or not you are approved for a loan will not be solely determined by the number of years in business, but rather by your credit history, your business plan, your management team, collateral, size of the loan etc.

How long does it take to get a business loan: The length of time it takes from the point of application to approval can range anywhere from a few days to a few months depending on your individual circumstances, the complexity of your deal and the lender that you are working with. Your broker can help you determine how long it will take for your specific loan to be processed. Make sure you are clear on estimated timeframes from the outset if you are dependent upon finances coming through within a set period of time.

Rolling over without providing regular financials is now a feature on offer from some lenders. However, the lending market is now very competitive and you should maintain contact with your X Inc Finance broker to ensure that every aspect of your situation remains competitive.