Author: LoanOne

How To Get A Business Loan Fast

Fast Business Loans | LoanOne

The process of applying for a business loan and having it approved requires lots of patience and perseverance. For many people, having such a loan approved in less than a month is next to impossible. This however doesn’t necessarily mean you cannot have your business loan approved quickly. All you need to do is identify business loans that are processed/approved within the shortest time frame possible. This article looks into the most common business loans and the processing time for the same.

A. Traditional Business Loans (Up To 3 Months)

This type of loan can take up to 3 months to be approved hence is at the bottom of the list for fast business loans. Traditional business loans are very common in the Australian market and commonly offered by the four largest banks in the country (Commonwealth Bank, ANZ, Westpac, and NAB). If the processing period takes longer than normal, this is related to the vast sums that one can borrow which is usually not less than $50,000. These loans are specially designed for persons/businesses looking for substantial amounts of money. The repayment period of the same extends to up to 10 years. This type of loan is ideal if you’re looking to purchase assets, business acquisition, or real estate.

Advantages of Traditional Business Loans

1. Low-interest rates which average 8% – the interest rate, however, depends on the collateral used to secure the loan.
2. More extended repayment periods of up to 30 years.
3. Flexibility to choose between variable and fixed rates. Some banks offer both.
4. Highly flexible repayments. The repayment plans can be monthly, quarterly, half yearly, or even annually.

The Cons

1. Only established companies and businesses with years of proven track record qualify for this type of loan.
2. Strict scrutiny and substantial paperwork during the application process.
3. Loans can take up to 3 months to be processed/approved.
4. Relatively high minimum lending amounts putting it out of reach for entrepreneurs and small businesses.

B. Hire Purchase (Takes One or Two Weeks)

Commonly offered by traditional bank lenders, it can take up to 2 weeks for a hire purchase loan to be approved. This type of loan is specially designed for the purchase of machinery, vehicles and heavy equipment. The repayment periods for the same range between 1 and 5 years. If buying a car or truck for your business, you are then required to make monthly payments of the agreed amount for a set period. It is after you have cleared the payments that the bank can transfer the title to you. In most instances, the bank requires you (the company) to make a balloon payment, which is considerably higher than the monthly payments. The main idea here is to help keep the remaining monthly payments lower and manageable.

Advantages of Hire Purchase

1. Ability to select payment terms suiting your cash flow and life of the asset.
2. You may be able to claim input tax credits for payable interest and fees included in the principle.
3. You get the asset’s title once all payments are done. You can then decide on whether to continue using it or sell it off.

The Cons

1. The bank holds the asset title until each payment is made.
2. Higher interest rates compared to traditional bank loan plans.
3. It is not the fastest available business loan out there.

C. Personal Loan (5 to 7 Days)

Yes, you can use a personal loan to fund your business. One of the advantages of a personal loan is that it is much easier to get when compared to business loans. In addition to this, there are no restrictions involved with personal loans – you can buy anything with the money. Personal loans, however, take about a week to be processed or approved, hence not the fastest way to get money out there. Personal loans, however, have a limit of $50,000 with a repayment period of 1 to 7 years.

Benefits of a Personal Loan

1. It is easier to obtain
2. Can be secured or unsecured. Interest rates are either fixed or variable.
3. Installment repayment plans make it easier to spread payments especially when looking to buy a substantial business asset.

The cons

1. Higher interest rates compared to business loans. Interest rates range between 8% and 20%.
2. The maximum amount you can borrow is determined by your credit rating, as well as the approval of the same.
3. Personal assets are at risk should you be unable to service the loan.

D. Business Credit Card (2 to 7 business days)

A business credit card falls under the fast business loans category, with approvals of less than 7 days. One of the benefits of a business credit card is the fact that it isn’t restricted. You can use the card to buy anything you want to boost your business. It also comes with flexible repayment plans for as long as you can pay the minimum required amount each month.

Advantages of a Business Credit Card

1. Flexible and very easy to use
2. Some business credit card companies offer an interest-free period (55 days) on purchases. This makes it an excellent way to make purchases for as long as you can repay within the given period.
3. You accumulate points, travel insurance, etc. from using the card (offered by specific companies)

The Disadvantages

1. Relatively high interest rates, up to 24%
2. Annual fees for the credit card
3. The business credit card may be linked to personal assets – this puts your assets at risk should you fail to make repayments.

Business Loan Application

E. Bank Overdrafts (1 or 2 days)

Bank overdrafts generally enable one to run on a negative balance on their regular business transaction accounts. Your business should however, have been in operation for several years to be able to get this line of credit. The best thing with bank overdrafts is it takes far less time to be processed as compared to business loans. If looking for a fast way to get a business loan, this should be on the top of your options.

Business Overdraft Pros

1. A quick way to get money if your business has a proven track record
2. Highly flexible. You only pay for what you need plus the interest.
3. Only the overdraft amount is chargeable.
4. It can either be unsecured or secured

The Cons

1. Interest rates are considerably high (8 – 12 %)
2. You can be called upon to make immediate repayment for the same amount of the loan.
3. Requires establishment and ongoing fees.

F. Online-Unsecured Business Loans (One-Day Loans)

Approved in 24 hours or less, this is considered the fastest business loan you can get. Companies offering these loans use the advances in IT technology to make applications smooth and easy. No paperwork is required with an online-unsecured business loan as everything is done online. You only need to provide required information online via a secure portal. Loan processing begins immediately. Thanks to technology, the lender can easily work out if you qualify for the loan, thanks to being able to access your accounting and bank details. Lenders will, however, have to review your credit report before approving the loan request.

Advantages of Online Unsecured Business Loans

1. The application process is fast and easy
2. Instant access to funds once approved.
3. Higher eligibility rate even for businesses that aren’t eligible for bank loans.

The Cons

1. High-interest rates when compared to traditional bank loans.
2. A personal guarantee may be required (this depends on the structure of your business).

While unsecured business loans may be alluring, you should take some time to read the company’s terms and conditions (fine print) before going ahead with the loan application. This is because some companies may include additional fees that you may not be aware of unless you have read their terms.

 

 

 

More Articles:

How To Put Debt To Work For Your Business

Tips For Using Your Business To Finance Business Expansion

 

 

 

Qualifications Banks/Lenders Consider When Processing A Business Loan

Business Loan | LoanOne

Are you looking to apply for a business loan but aren’t sure what is required of you? Understanding the factors that banks other lenders take into consideration when processing a loan can help you make the most out of it.

While every lender wants to minimise risks as much as possible, several legal stipulations require them to make a responsible decision when processing and approving loans. This is particularly enforced with lenders that impose stricter compliance requirements for users, – online lenders for example.

For this reason, banks and other institutions use the same formulae when processing loan applications, hence there is no need to be afraid.

Lenders/banks consider the five C’s of credit when processing a loan. These C’s help them determine whether you qualify for a business loan or not. The 5 C’s are collateral, character, capacity, conditions, and capital. Each of these factors plays a crucial role in the loan application assessment.

1. Character

Lenders need to understand your character first before they can approve a loan application. To understand this, they have to dig deeper into your past financial activities including loan repayments, savings, your credit score, and your experience in the industry (number of years in business). Among other factors, the banks/lenders want to evaluate your ability to save, income stability and strength, cash flow, and prompt debt repayment. Other factors include bankruptcies, legal actions against you or the business, and defaults. Any record of the factors outlined above puts a massive dent in your ability to repay future loans.

Banks, among other lenders, won’t however, approve business loans for individuals with ATO debts, regardless of set payment plans. Be sure to put these into consideration before applying for any business loan.

2. Collateral

Collateral

This is one of the critical requirements for secured loans. This usually is in the form of tangible assets. This can be a commercial or residential property, vehicles, land, and other valuables. The lender will under most instances want to assess the suitability of these assets, their location, their current condition, and if they can be sold to cover for the costs. Assess the condition, value, and liquidity of any assets you wish to use as collateral before turning in the business loan application. You don’t need collateral for unsecured loans but be prepared to pay a higher interest rate for this.

3. Capacity

Lenders need to look into an applicant’s ability to repay a loan before approving it. They will, therefore, have to look into your existing debts, income, dependents, and living expenses to determine this. It would, therefore, be advisable to consider your income flow, revenue stability, ability to pay, and contingency plans should your financial situation change before applying for a business loan.

4. Capital

Lenders need to assess your capital when processing business loans as well. They have to consider one’s overall financial status, nature of liabilities, and liquidity of assets before approving or disapproving the loan. You, therefore, stand a better chance of having the loan approved if the collateral or assets can be liquidated fast enough to meet the obligations at hand.

5. Terms and Conditions

There are set terms and conditions (by every lender) that you should agree to before applying for a business loan. Some of these terms include interest rates and fees, repayment schedules, and anything else related to the loan before it is granted, and during the life of the loan. It is advisable to go through the terms and conditions carefully and ensure you have understood them before agreeing to the same or submitting the application.

Questions you might have/need to answer when applying for the business loan

What do you need the loan?
How much do you wish to borrow?
How soon do you need the money?
For how long do you need the money?
How will you repay the loan?
Define the risks involved with lending you money?
What is your backup plans should the loan be denied?

The process of applying a business loan is a rather intimidating one. It can, therefore, be frustrating if your application is turned down, and especially if you had to wait for months for the loan to be processed.

While a secured loan would be a welcome financing option, you can still evaluate other viable financing options as well. An unsecured (online) loan is a good example and perfect alternative to bank loans. Unsecured business loans are recommended for businesses without a proven record of accomplishment or any assets they can liquidate for that matter.

Some of the best online loans process and approve unsecured business loans within 24 hours. Applying for the loan only takes 10 minutes of your time. Once approved, the funds are transferred to your preferred account immediately.

Tips For Financing A Franchise

Tips For Financing A Franchise | LoanOne

You have carefully read the information, done all of your due diligence, weighed up your chances for success, and have decided that a franchise is the route you want to take to start a business.

However, before you sign anything, you first need to answer this question: Where are you going to obtain the money for financing your franchise, working capital, inventory, and royalty fees?

Before you approach a lender the first thing that you should do is determine your net worth. In order to do that a personal balance sheet is used to list your assets (the things you own) as well as your liabilities (how much you owe). On the assets side, add up all of your holdings – checking accounts, cash on hand, saving accounts, securities, bonds, vehicles (whether or not they are paid off), cash values on insurance, and another other assets that you own – and then total them together.

Liabilities are the other part of a balance sheet. Follow the exact same steps that you used for determining your assets. List all of your current bills, your home mortgage, credit cards, finance company loans, auto loans, personal loans, and so forth. Then take the total of your liabilities and subtract them from your assets. After you have your balance sheet complete, check your credit rating. All potential lenders look at three common factors when checking a credit rating: track record, income, and stability.

Most lenders want to know how long you have lived in the same place or been at a specific job, and whether or not you have a track record of completing things that you start. You need to be prepared with a good explanation if your history doesn’t show a record of stability. The amount that you earn is very important but being able to live within your means is also key. There are some individuals who earn $100,000 per year that still are unable to pay their debts, but other people are able to stay within their budget on $20,000 per year.

There is a very good reason why a majority of lending institutions review your income and how you live within your income. If you are unable to manage personal finances, there is a good chance you won’t be able to successfully manage your business finances either.

Your track record is the third thing that lenders look at – which is how successful you have been able to pay your past obligations off. If you have a track record of repossessions, delinquent payments, and so forth, you will want to get those cleared up before you try to get a loan.

A majority of lenders contact credit bureaus to check your credit file. We recommend that you do the same exact thing before attempting to borrow any money. Credit bureaus under the law are required to provide you with all of the information that they have on file that is associated with your credit history. After you have this information, make sure to get any errors corrected or at the very least be sure to get your version of the story on your credit report. For example, a 90-day delinquency will look bad, However, if the cause of your 90-day delinquency was due to illness or being laid off, then that should be considered.

Business Plan

Once you have determined what your credit rating and net worth is, the last step that you take before you approach lenders is to put your business plan together.

Having a carefully-thought-out business plan is something that can make a significant difference between your loan application being rejected or accepted. A comprehensive plan always should include a close technical study of whatever business you are planning to go into; accurate cost analyses, projections, and pro forms, working capital estimates; a demonstration of your “people skills”; and an appropriate marketing plan. Your business plan should also include several credit references and certified statements on your net worth.

If you aren’t familiar with creating a business plan, get professional help or review business plan preparation software like BizPlan Builder Interactive or Business Plan Pro.

Franchise

Franchisor Financing

The first place that franchisees traditionally have turned to for financing are their franchisors. Nearly all U.S franchisors only provide debt financing. Some carry either a fraction or an entire loan via their own finance company. There are fractions ranging from 15 percent to 20 and 25 percent and up to 75 percent of the overall debt burden.

The loans that the franchisor makes can be structured in several different ways. There are some that offer loans that are based just on simple interest with no principal, and then in five or 10 years, there is a balloon payment due. There are others offering loans where there are no payments due during the first year.

Rather than financing the whole start-up cost, some franchisors might offer financing for part of the total cost. They might have financing plans for operational costs, the franchise fee, the equipment or any combination of these.

Along with start-up costs being partially financed by the franchisor, they also normally work with leasing companies to arrange for the franchisee to lease the equipment that they need for running their franchises. That can end up being a significant part of the overall financing, given that equipment frequently runs from 25 to 75 percent of the total start-up costs for a franchise.

If you are considering a franchise that doesn’t provide equipment leasing, check with non-bank, non-franchise companies specialising in providing franchises with equipment leasing. These kinds of financing companies frequently offer asset-based lending for financing the franchisee’s fixtures, signs, equipment, and furniture, and also allow the franchisee to buy the equipment once the lease has ended. Remember that under current law you might lose some tax advantages when leasing equipment.

Keep in mind that there are two main reasons why a business is franchised: to raise capital and for expanding the business. Therefore, if your credit record is reasonably good and you meet all of the financial requirements, a majority of franchisors will do everything they can to get you on board to join their team. The assistance that is provided by franchisors will usually help you get financing that includes help with business plan preparation and introducing you to various lending sources. Many times, franchisors will act as guarantors of the loans that you get.

Other Financing Sources

Once you have determined what financing is being offered by your franchisor, your next step is to make a list of all other sources of capital that are available. The following contacts are used by most sharp business people: finance companies, SBA (Small Business Administration) loans, bank loans, veterans’ loans, home mortgages, and loans from relatives and friends.

Banks are frequently not willing to work with certain individuals based on their financial profile. However, when there is an SBA loan guarantee they can become more amenable. The SBA guarantees those loans up to 90 percent. All a small business needs to do is submit their loan application to their lender for it to receive an initial review, and then if the loan application is found to be acceptable by the lender, its credit analysis and the application will be forwarded to the closest SBA office. Once SBA approves it, the loan is closed by the lender and the funds are disbursed. The borrower will then pay back the lender by making loan payments.

Some franchisors have reported that financial brokers have approached them – whereas historically it was only the big deals that they were most interested in. They do this to put large pools of money together using private funds and the SBA. Those funds are then available to franchisees via the franchisors similar to a trust fund. The fund would be contributed to from groups of small banks that have funds to invest from all across the country.

Other potential options include taking out a second mortgage on your house or getting a home-equity line of credit. However, you need to be careful when using this kind of financing. Keep in mind that a second mortgage and home-equity line of credit are both secured by your house. If you are unable to repay the amount you are financing from this source, the you could be risk for losing your house.

Tips For Your Consideration

There are numerous financing sources that are available to help you with launching your dream franchise. However, it can be disastrous running a franchise without having any reserves and being blind to unexpected business problems that can arise. A good rule to keep in mind: You should never invest over 75 percent of your total cash reserves. So don’t invest any more than $7,500 if you have a total of $10,000. Invest $18,750 if you have a total of $25,000.

Most important of all, keep in mind that a franchise’s price isn’t always a reflection of the real cost of the actual business. There can also be additional costs that may also include payments on signs, fixtures, equipment, building and land, and may cover administrative costs, opening promotional costs, training, leasehold improvements, inventory, and sales commissions at times.

Make sure you have a good understanding of your cash investment requirements. You are going to need to have a cushion of working capital in order to guide your business properly through all of the ups and down. However, if you do thorough research, and keep in mind that the most important sale that you will ever make is financing a business, then you will be well ahead of your competitors.

15 Quick Franchise Financing Tips

1. Speak to your franchisor before you search for outside financing; get pre-qualified or approved.

2. Family and friends are the most common start-up capital source. Make use of this.

3. Look for lenders who understand franchising in addition to small businesses.

4. Be completely upfront and honest with lenders. Don’t hide anything. Be prepared to explain anything and everything.

5. It is important to be neat. Fill out your loan and credit applications out clear. It is best to type them.

6. Don’t weigh your application down by having a lot of documents attached.

7. Don’t use up all of your liquidity by paying outstanding debts off before you file your loan application. Lenders like you to have some available capital.

8. If you are lacking in liquidity, find a partner who has money.

9. To improve your balance sheet and conserve start-up capital, consider equipment leasing.

10. Minimize your expenses and debts. Many business owners end up taking too much debt on and forget that they need cash flow in order to pay their debt.

11. Consider purchasing used vehicles, furniture, equipment, etc.

12. Before you waste time, gas, energy, and phone calls, use the internet first. There is so much useful information that is available. There are even websites that let you file your loan applications online.

13. Don’t forget about venture capitalists and angel investors.

14. Avoid taking out money from your children’s college funds or your retirement money. There is risk involved in all startups – including franchises.

15. Never give up.

 

 

More Articles:

How To Get A Business Loan Fast

How To Put Debt To Work For Your Business

 

 

Tips For Using Your Business To Finance Business Expansion

Business Expansion | LoanOne

When you first launched your business, there is a good chance that there weren’t a lot of options available to you for borrowing money. Usually, it takes time to get your credit score built up and lenders don’t like taking big risks on brand new companies.

This often results in many new business owners factoring in their receivables whenever they need some extra money.

However, if you have been in business for at least a couple of years, it might be possible for you to upgrade your finances. There is a natural progression at that point to add asset-based loans along with factoring.

Factoring Limitations

Factoring involves selling some of your customer invoices off to a financing company, which is called a factor. You will then be paid upfront for the amount of the invoices by the financing company, less their fee, and they then collect payments from your customers.

Although factoring is convenient, it also is limiting. You only are able to borrow based on the sales and account receivable collections that your business is making. If the only way to increase your revenue is through borrowing money for expansion, factoring can leave you stuck. You are at the point where you aren’t making the necessary sales to borrow additional funds but without additional financing, you can’t make the extra sales.

Advantages to taking out an Asset-Based Loan (ABL).

One way that you may be able to get out of this tough situation is to take out an asset-based loan. An ABL involves borrowing money and then paying it back with interest, just like you do with a traditional bank loan. The main difference is the loan is secure with valuable business assets – such as certain machinery or your inventory. When they are first getting started a majority of businesses don’t own those assets yet, but after a couple of years it is more likely that they will have the necessary resources for taking an ABL out.

The main advantage to taking an ABL out is that more financing will be accessible to you. Your financing will not be limited to the amount of your unpaid receivables. That can significantly free more money up that can then be used for growing your business. In certain situations, an ABL might have lower borrowing costs than factoring does. However, that isn’t always true, so you need to compare the numbers for both of the scenarios.

Using Your Business To Finance Business Expansion

Things to consider before you take an ABL out.

Before you get an ABL, there are some drawbacks that you need to consider first. If you are going to borrow money using this type of loan, you need to make sure you will be able to handle making your loan payments. If you are unable to keep up with your loan payments, eventually your lender could end up seizing your asset. Losing machinery or inventory when your business is struggling already would worsen the situation even more.

You will also have to pay interest on the money that you borrow. It can add up and become a significant cost over time and has the potential for hurting your bottom line. If your company is going to borrow money, be sure you have a plan for spending it productively and in such a way that it will put your business in a much better financial position.

When an ABL is used properly, it can be a very valuable financing strategy to use. When ABL is combined with factoring, it should give you access to all of the money that you need for taking your business up to the next level.

6 Ways To Get A Quick Business Loan

quick business loan

Do you know what to do when your company needs cash fast? Would you start searching for an emergency business loan, a fast business loan or same day business loans? If you think your options are limited when it comes to getting small business loans in under 24 hours, we have some good news for you.

There are plenty of options! Fast business loans from trusted lenders are now available in a matter of hours. These are perfect for you whether you need a cash infusion to assist with seasonal trade fluctuations or you have a business opportunity that you must act upon immediately.

These lenders work much differently than traditional ones and give you the chance to get instant approval. So if you need cash fast, don’t be too concerned as there are plenty of alternatives. Let’s take look at some of these alternatives when you need cash fast.

 

How to Get a Quick Business Loan

Here are 6 ways to get funding in 24 hours and bring your business back to life!

1. Stock Opportunities

Are you in a position where you could seize valuable stock? You know that you need cash to do this and you want to do this before the price goes up. If you do not have cash ready and you have a high stock turnover, you could be faced with crippling problems.

One solution is to get a same-day loan. You want a same-day loan that offers you the chance to obtain the cash you need right away with a short repayment plan. This will let you maximise the profit on your stock. This is the type of finance used mostly by SMEs and companies with short trade histories.

The financing is attached to your stock. Stock finance is a solution that is based on stock with a line of credit attached to it. You can obtain a drawdown in under a day. These credit lines are usually only offered by alternative lenders who will analyse the businesses in your supply chain. If their capacity for producing looks alright, the line of credit will be approved.

Benefits of stock finance include having the security attached to whatever stock you are buying. This allows you to buy stock on larger scales. Doing this allows you to develop ties and partnerships with bigger businesses. If not for this finance option, you may never have been able to do trade with some of these businesses.

2. Asset finance

Murphy’s Law strikes most businesses at some point in time and often times with disturbing regularity. You know it right? What can go wrong will go wrong? What would happen if a structural problem in your building halts production and puts your company on hold for a time? Or how about a major machine fails? You need to be prepared for when this happens. You want to protect your business against these types of risk.

With a method of funding already put into place, your company does not have to suffer if these things happen. Being able to access money when and where you need it is a fantastic way to keep any big risks from causing damage to your company.

Do you have a good deal of capital tied up in your equipment, vehicles, machinery or other assets? Asset finance can get you the capital you need, quickly.

Asset finance provides financing with the value of your major assets as security. This lets the loan proceeds get to you much faster than any other finance products. With the right conditions, these forms of financing can be arranged in under 24 hours.

3. Invoice Finance

We have all heard the saying “the cheque is in the mail”. Yes, of course it is. But what happens when you are in need of that cheque, and no matter how hard you chase after it, there are still delays in receiving it. When your customer tells you they are waiting on an invoice, you know it will be a long while before you get paid.

What would help you? How about a friendly bank manager with access to an overdraft facility? This is a person you would normally reach out to, yet have you noticed that bank managers are not so friendly anymore?

What is more, because the bank closed your branch you do not even get passed through to your manager. The days of bank managers are gone. Usually your call goes to a business centre where you speak to some agent who does not know you or your business at all.

And guess what? Your invoices still sit, unpaid, and so do your staff.

The answer lies in invoice financing. There are many different types of this financing. One is to sell your invoice to the lender. You get to use the money to pay your staff and invoices.

Once you set up an agreement, the invoice financing facility lets you draw down a percentage of your invoices right away. Your late payments are curtailed and you can keep up with trading.

4. Small Business Loan

Debts may pile up for a number of reasons. Emergency repairs, the loss of a major client, a huge tax bill – these situations can cause your business to take on more debt than necessary.

The solution is through a small business loan. A loan like this restructures your existing debt liabilities. You can continue to trade and you can get a handle on your debts. All this with one convenient payment.

Apply to an alternative lender and get this money within a week or less.

5. Cash Advance

Is your company subject to seasonal trading? Seasonal trading and cash flow issues are not limited to Christmas. They can occur any time of the year and for any business. The problem with seasonal trades is that they are largely out of your control.

The solution is a cash advance. Get things back under control with a short-term solution and long-term benefits. In essence, a cash advance is a quick business loan that infuses your business with cash to get it through difficult times.

A portion of the money that is raised from each sale goes back to the lender but having cash lets a retailer buy into stock and manage overhead. With this power, your business can take advantage of seasonal sales opportunities all without waiting for customers to buy.

6. Bridging Loan

Are you still waiting on completion of a building or waiting for another type of loan to be approved? Are you concerned that this will not happen fast enough for your business? You may need a temporary form of financing that lets you get by.

The answer to this situation could be a bridging loan. A loan like this is used when a property is purchased for example. It works to bridge the gap between the purchase and the completion of the building. It can also be used to resolve emergency financial situations. These loans are quick to arrange because they are only needed for short periods of time.

They are also the cheapest option to use for raising funds. You can obtain one without extensive credit checks. One caveat to be aware of – they are secured against your property.

 

What is needed for a same day loan for your business?

There are some things to consider seriously before you approach a lender. If you are applying for a same day business loan, here is a list of what you will need so that you can have the best chance of being approved.

1. Tell us about your business – have a statement ready which details your business, its stakeholders, and history.

2. Previous investments – what previous investments has your business had? How has it made a difference?

3. Reason for finance – why do you need the money? What will you use it for?

4. Repayment and security – demonstrate you will repay the loan and describe what security you can offer.

5. Balance sheets and cash flow – give the latest accounting figures. Show all profit and loss statements and turnover.

With the help of LoanOne, you can get a quick loan. We take a look at your credit history, the amount of money you require, and the character of the industry and your business. LoanOne is one of the fastest growing financial companies in Australia.

We offer both personal and business loans with competitive rates across a broad array of industries. Our loans are fast, flexible and can be tailored to both your personal or business needs. We can have your loan approved with 24 hours so you can continue to focus on your business. Click here to apply online now!

What is a Business Equity Loan?

business equity loan

A business equity loan is a business loan in which a property is used as a security. There are many people who don’t know that you can get a great interest rate when you take a business loan and use your residential property as the security.

 

How can I qualify for a business equity loan?

The most important factor before you qualify is that the loan must be used for business purposes because these types of loans are unregulated. The loan can be used to buy a commercial property, buy shares or investing it into the business. To do this, you must have a property that has enough equity. What happens if you don’t have equity in a property? We will cover this later in the article. Let’s first take a look at the business loan application process using banks.

 

Why are banks charging more when you want a business loan?

This is one of the most common questions we get. Why do banks have to charge a higher rate when the loan is meant for a business purpose? Why should this be the case when the bank has the same equity in the property used as security?

The lender has a higher risk when you purchase a business or start a new one, there is a higher risk of default when compared to buying a property then taking a standard home loan. This risk of defaulting gets reduced when the business has a proven track record.

Assessing the application will take more time: Lenders usually have quick automated methods like credit scores when assessing a home loan application. When it comes to the assessment of loan for a business, the lender will have to hire credit managers and business bankers who are experienced in this area, and this means the lender spending more on the department and salaries.

Lack of competition: you will find that many of the customers will choose one of the top four banks when they want a commercial loan. This results in lack of competition in this space, and most borrowers don’t know that there are other options that provider cheaper rates and discount packages.

 

How is loan assessment done by the lenders?

The process of assessing a business loan is the same as the process used in assessing a home loan. The security must be adequate, the income sufficient enough to pay the loan, and the borrower must have a good credit history. Apart from the above basic requirements, there are some other aspects of the loans that will be assessed:

Purchase of business: Although there might have financial statements that confirm the income of your business, there is no guarantee that the same results will be seen by the new owner. This is why lenders tend to become a little more conservative when it comes to the assessment of such applications.

Startup Business: A new business is able to get a loan provided they have a solid business plan, the owner has experience in that industry, and cash flow projections. These types of loans must be secured using property.

Working capital: If a borrower is interested in a loan for expanding a current profitable business, then he is in a good position because lenders like such borrowers. These loans are low risk because there is already a proven business model and income.

On top of that, there are questions that will most likely be asked by the bank when you apply for a loan. You will notice that these questions are mostly open-ended and will cover a lot of areas from why you are applying for the loan, the security, your serviceability, and your character.

  • What is it that you do? Why and how do you do it?
  • How did you get started in this industry? How long have you been there?
  • What is the reason behind starting the business? How long have you operated the business?
  • How are your accounts managed? Is there any problem you have experienced in this area?
  • Do you have risk protection and insurance? Which ones do you have?
  • Do you depend on top customers? What would happen if something was to happen to these top customers?
  • What happens if something happens to the suppliers?
  • What are some of the biggest challenges? What are some of the biggest opportunities?
  • What will happen if the payments do not come on time?
  • What do you aim to achieve in the next six months, one year, and 5 years?
  • What is it you are aiming to achieve, how, and why?
  • What this means for your business (income, cash flow, customers, market, staffing)
  • What assets do you personally and the business have? Are they saleable?
  • What are the securities you want to use to get the loan?

However, what happens if you don’t have equity in a property? How can you get a business loan then? That is where LoanOne comes into it. LoanOne is one of the fastest growing financial companies in Australia. We offer both personal loans and business loans with competitive rates across a number of different industries. Our loans are fast, flexible and can be tailored to both your personal or business needs and are done completely online. If you are stuck and don’t have equity in a property and you need a business loan fast, contact LoanOne today! Please click here to make an application now!

Secured Personal Loans Against Cars

secured loan against car

A secured loan is a type of loan where collateral is provided in exchange for a loan. The collateral, in many cases, is the item that the loan is taken out for. For example, on a home loan the collateral is the actual house. If the borrower does not meet the loan terms, then the house can be repossessed by the mortgage lender. In many cases, this is also true on auto loans. The collateral on a car loan is the actual car that the loan has been taken on. When a borrower fails to make their agreed-upon repayments, the lenders can repossess the vehicle. However, you are also able to take out a personal loan for a particular purpose and use your vehicle as security.

 

Requirements For A Secured Loan

If a lender requests collateral on a loan, then the borrower must own the property that is offered. In many cases, however, the collateral on a secured car loan is the actual vehicle. Following is a list of items that will be required by the lender.

Income: A borrower is required to have verifiable income. That can take the form of providing paycheck stubs from several of your most recent pay periods, tax return copies for self-employed individuals, or bank statements showing regular monthly deposits if you have other income sources.

Employment: You will be required to show a steady income source. For most individuals that will be some type of employment. Generally speaking, lenders prefer applications to show that the applicant has been steadily employed for at least the past 12 months. However, for individuals who are self employed or people who have other income sources (inheritance, spousal supports, etc), if you can demonstrate that you have a predictable and steady income, then a majority of lenders will be willing to work with you.

Residency: Lenders, in many cases, will want applicants to be able to show steady residency and to have lived in their current home for at least 12 months. However, if you have recently moved residence, you may be able to show that you previously lived in one place for at least 12 months during the past several years.

 

Advantages Of Loans Secured Against Cars

For people who own their vehicles, it maybe an option to get a loan secured against your vehicle and get the best loan terms and interest rates that a lender offers. Apart from the liability associated with linking an asset or property to the loan, there are significant and specific advantages that are offered with a loan secured against your vehicle.

Flexible terms. Due to the fact that the lender is given collateral against the loan, borrowers that take out a loan secured against a vehicle will enjoy more flexibility when it comes to payment terms. More flexible terms might result in the borrower saving money since the individuals will have better control over when and how they pay back their loan.

Lower income requirements. Once again, with the loan being secured against collateral, in general the lender will not be as stringent on your income level. This is why loans secured against vehicles are ideal for prospective borrowers who might have maturing investments or significant freelance income, but not steady paychecks from employment.

Lower interest rates. So much of the shopping process for personal loans is taken up by searching for the lowest interest rates. However, as your as using a vehicle as collateral, you will most likely receive a more generous interest rate.

Safety and Security. As long as borrowers do not default on their secured loan, you can save money over the period of the loan. That is why, during times when credit is hard to get and lenders are being very conservative, opting to secure a loan against your vehicle provides the lender with more comfort and security.

Check on the penalties. If you fail to make your payments on time on a loan secured by your vehicle, then your vehicle might be repossessed. Check to see what specific terms that your loan offer includes to find out how many payments need to missed, in addition to how much the penalty fees are. Don’t take out a secured loan if there is a possibility that your financial situation might cause you to end up losing your car. That will damage your credit and end up costing you money.

Weigh the benefits. Given that there is less risk on loans secured by vehicles for lenders, they might offer benefits that you would not usually get. Check through the loan offers and search for extended repayment periods and low interest rates offered due to it being a secured loan. Depending on what your credit is like, you might be eligible to receive additional benefits such as not being required to make a down payment.

If you are in need of fast cash and have a vehicle you can use as collateral, then applying for a loan with LoanOne is the way to go. LoanOne is one of the fastest growing financial companies in Australia. We offer both personal loans and business loans that can be secured with a vehicle with very competitive rates. Our loans are fast, flexible and can be tailored to both your personal or business needs. Apply now!

How Do Non-Bank Lenders Actually Work?

non-bank lenders

Has there ever been a time when you have needed a personal loan or business loan and have automatically used a bank? This is naturally what most people do. However, the modern economy is a place where non-bank lenders are now legitimate alternatives you can choose over traditional banks. They have brought about a very competitive environment, which is seriously advantageous to borrowers.

So just what are non-bank lenders? In a very technical sense, non-bank lenders are lenders that aren’t your typical credit unions, banks, or building societies. Rather, they are an establishment with a source of their own wholesale funds, which they lend out in order to generate profit.

Usually, a non-bank lender might also be somebody like a mortgage manager, which is someone that borrows bank money at wholesale rates before lending it out again with an added margin.

 

Advantages Of Using Non-Bank Lenders

There are a number of major benefits in using a non-bank lender. Given that they borrow their funds at wholesale rates, this usually means they have wide margins to work with, so they’re able to give you interest rates lower than what the big banks might do.

One other advantage of using non-banks in lieu of conventional banks is their actual size. They’re often smaller, and as such, subjected to different rules and regulations, meaning non-banks have more flexibility in how they approach lending. They’re better positioned to tailor loan products that suit the unique circumstances of each customer.

Being smaller organisations, this means that they also offer better levels of customer care. A majority of borrowers rank personal service highly, especially those that have had bad experiences with banks. This means that non-banks are in prime position to provide customised service as well as quicker turnaround times on their loan applications.

Another huge benefit that non-banks can provide over traditional banks is that they are typically more willing to lend money to higher-risk borrowers, like self-employed professionals. They’re also more flexible in terms of fluctuations in a person’s credit history.

READ MORE: What is the Difference Between a Bank and a Non-bank Lender Business Loan?

 

Non-Bank Lending Has Evolved

Non-bank lending rose to prominence in the ’90s and early part of the new millennium. This developed through lenders who were able to access wholesale funds sourced through securitisation markets, where asset bundles including things like mortgages get sold to investors.

Following the GFC, the securitisation markets dried up significantly, forcing non-banks to seek out new funding sources. Sometimes, that meant going to the actual banks. Back in the economy of securitisation, non-bank lenders sometimes accounted for as much as half of the market. Now, they are less than a seventh of that.

Despite this, non-bank lending keeps growing in terms of a sector as it offers borrowers viable alternatives to the big banks, and that keeps competition alive in the lending market which ultimately benefits the borrower.

 

Non-Bank Lending Regulation

Even though banks typically enjoy the perception of safety given their size, history, and level of government regulation and security, the truth is that modern non-bank lenders must also now comply with extensive industry and legal codes. Specific applications include National Consumer Credit Protection laws, Australian Consumer Law, the ePayments Code, Privacy Law, and ASIC laws. The only real difference that banks have is that they are also subjected to an additional layer of regulation which the Australian Prudential Regulatory Authority oversees.

After it is all said and done, the choice to use a bank versus a non-bank lender should ideally boil down to which kind of lender offers the product that best suits your circumstances. As with any other purchase, your decision needs to be based on value for money, product availability, and how compatible the product is with your needs.

Non-bank lenders have advantages in many of these areas so should be at the top of your shopping list when you’re on the hunt for a business or personal loan. However, just like any other important money decision, you need to do thorough research and due diligence first. As always, professional advice can be useful in making these important decisions.

LoanOne is one of the fastest growing non-bank lenders in Australia. We offer both personal and business loans with competitive rates across many different industries. Our loans are fast, flexible and can be tailored to both your personal or business needs. If you’re in need of some fast cash, then click here and apply today!

What’s The Process To Apply For A Fast Personal Loan?

fast personal loan

A personal loan can come in really handy when you are in need of a financial boost or some extra cash to help out with an emergency. Applying for a quick personal loan is actually very easy especially if you are already familiar with the relevant information and requirements as part of the application process. Let’s take a look at the process from start to finish and break down the requirements and considerations.

 

1. Decide On Your Goals

Purpose of The Loan

First and foremost – what do you intend to spend the money on? You can use the money to make a wide range of large purchases but this is not always a good idea. Some of the most common uses of personal loans today are:

  • Paying medical expenses
  • Paying for a vacation or holiday
  • Financing a wedding
  • Home improvement projects
  • Debt consolidation
  • Car purchase

Smaller purchases may not actually require you to take up a personal loan. Others sources of funds such as credit cards are more suitable for these kind of purchases.

Next, you need to settle on a specific amount to borrow. This depends on several factors such as:

  • How much does the item/wedding/vacation cost?
  • How big is the debt you are looking to consolidate?
  • Will you use the loan to settle all your debt or will you complement the loan with your savings to settle the full amount?
  • How much can you borrow and be able to repay comfortably?

Once you have considered the above factors, you can then move on to the numbers.

 

2. Calculate How Much You Can Afford To Borrow

calculate your loan

Prior to shopping around for different types of loan products and applying for your preferred one, it is important to know how much you can afford to borrow.

You can determine this by calculating your income (salary or earnings) and your recurring expenses such as childcare, living expenses, bills, mortgage, rental payments etc.

You really need to be as accurate as possible when doing these calculations so that you can arrive at a realistic figure of how much money you can really afford to borrow. Later on, you will be asked to provide these estimates during the loan application process. If you are unable to provide this information, your loan application may be declined.

After arriving at a realistic estimate of how much you can borrow, you can then move on to calculate your installment amounts and the interest you will pay. This information will also help you to determine whether or not your loan amount is feasible.

 

3. Decide On The Right Loan

There are a variety of personal loan products out there today. Some of the main options you can expect are:

  • Short Term Vs. Long Term
  • Fixed Vs. Variable Interest Loans

Your decision on which type of loan to go for should be based on things like whether you will be comfortable with a variable rate or would rather stick with a fixed rate, how much money you need (amount), and the purpose of taking the loan.

It is advisable to talk to a loan expert if you are not sure about which loan product is best suited for you.

ALSO READ: How to Choose the Right Small Business Loan – Same Day Loans?

 

4. Submit An Application

Different lenders have different application submission procedures. Before you begin the application process, it is important that you gather all the details you will need so that the entire process will be quick and seamless. This will eliminate the need to update information or add extra details later on that will hinder the process.

Another important factor to consider is that all the loan applications you submit are included on your credit record so it is highly recommended that you don’t make too many simultaneous applications. If you have too many rejected applications, this will negatively impact your credit rating in the long run. Another thing is that you need to approve for a credit check to be done before your application to be considered.

Some of the information you may be required to provide on the application form include:

  • Personal details of applicants (name, gender, address, contacts, date of birth etc.)
  • Number of dependants for each applicant (people who financially depend on you, both at home and in other locations)
  • Identification document (Medicare card and birth certificate, or passport or driver’s license)
  • Employment details (current and previous employment)
  • Income information (salary, investment earnings, rental earnings, child support, annuities/superannuation earnings). You will be required to provide both ‘gross’ and ‘net’ income details. Gross refers to all earnings you get pre-tax while net refers to earnings received after mandatory deductions are done.
  • Information regarding recurrent expenses and general living costs such as fuel, groceries, utility bills, rent, insurance payments etc.
  • Information on other loans and financial obligations you may have (mortgage, personal and business loans, credit card bills and other forms of credit)
  • List of assets you own such as homes, cars, savings, real estate property, bonds etc.

It is advisable to provide all the necessary information in a thorough and detailed format. The lender is then able to make a much better assessment of your borrowing ability in order to provide a comfortable repayment plan.

Upon submission of your application, the lender will consider a wide range of criteria before giving an official response on loan approval.

 

5. Supporting Documents

It is possible to get a conditional loan approval which requires you to provide some supporting documents for your loan to be approved. The lender will communicate which documents are needed and how recent they should be.

Some of the documents you may be requested to submit are:

  • Proof of earnings and income (government benefit statements, child support agreements, rental property statements, employment contracts, payslips and any other relevant payment receipt document etc).
  • Proof of recurrent expenses and general living costs for applicants and dependants (loan account statements and a recent copy of your current account statement).
  • Supporting documents for other applicants in the case of a joint application. All applicants must provide relevant and up to date information.

6. If approved, you are issued a loan contract that has all the relevant information pertaining to the loan such as the terms and conditions of the loan.

Upon receiving the contract, your loan is disbursed to your account and it may take at least a day for the funds to reflect in your account. The mode of delivery for the funds depends on the lender and the type of loan you applied for. For instance, funds can be sent electronically to your accounts, or via BPay or via cheque. Any special information regarding your loan will be highlighted in your loan contract.

You can consult with your lender to find out when you need to make your first loan payment as well as how often you need to make the payments (weekly/bi-weekly/monthly/quarterly). Many loan products also have provision for making extra payments when you find yourself with extra money. However, it is important to find out if there are any extra charges or fees incurred because of making extra payments or early loan repayment.

 

Are you good to go?

LoanOne is here to help. LoanOne is one of the fastest growing financial companies in Australia. We offer both personal and business loans with competitive rates to different industries. Our loans are fast, flexible and can be tailored to both your personal or business needs. Please click here to get the loan application process started now!

What Type of Business Loans Are Available

business loans

Kelly O’Dywer MP, the Federal Minister for Small Business has reported that 97% of businesses in Australia are classified as small businesses. This shows that it is the entrepreneurs in Australia, the ones that have a commitment to chasing their dreams who fuel the small yet vibrant business culture of Australia.

It is a known fact that a small business doesn’t mean smaller resources or operating a business without the latest technology and innovative tools. However, when finance is required to
enable your business to remain competitive, business overdrafts and business loans are still a very popular option. Let’s take a look now at the different types of business loans.

 

Overdraft Vs. Loans

LoanOne rates and researches business loans facilities. We are aware that every business owner has their own set of unique needs and requirements in association to credit needed for the business. LoanOne is focused on offering results that match us to the borrowing profile when it comes to business loans.

Business loans and overdrafts are critical in helping businesses stay afloat, or remain competitive. Business loans can be used for a number of different purposes like upgrading software or equipment, buying a storefront, or even to pay employees when you experience a temporary shortage in cash flow. Following are some common forms of business loans.

1. Residentially Secured Overdraft

This is an overdraft facility which is secured by a home that you reside in. When the overdraft is secured it lowers the risks for the bank. This means they can usually offer you lower interest rates.

2. Commercially Secured Overdraft

This overdraft facility will be secured with real-estate property that the business owns. Once again, the security with your overdraft will lower the risk for your lender, meaning they are able to offer lower interest rates.

3. Residentially Secured Term Loan

This is a loan that is required to be repaid in a set time frame, which is secured with the property that you reside in.

4. Commercially Secured Term Loan

These are loans that need to be paid back within a set time-frame, which are secured by the real-estate property of your business.

 

Loan Features That All Business Owners Should Be Considering

business loans consideration

1. Additional Repayments

When you are able to make additional repayments over the scheduled regular payment, it offers an effective way to pay the loan back faster, along with an added bonus of paying less interest in association to the life-span of the loan. Not all of the lenders will provide this type of facility, and you need to be aware that some lenders charge an early repayment fee, which means it will be pointless to try and pay off the loan sooner if you are forced to pay for this privilege.

2. Redraw Facility

This facility offers business owners with the ability to withdraw additional repayments which were made over and above the required regular payments. This makes the loan-term a little more flexible, meaning you are able to pay more in when you are able to afford it as well as withdraw it out again when needed.

3. Lump Sum Repayments

In some cases when a business is experiencing good cash flow, they might choose to repay a large chunk of the loan, in what is known as a lump-sum repayment. Similar to many small additional repayments, the lump-sum repayment will decrease the loan balance faster and means you will be liable for less interest during the life-span of the loan.

4. Split Loan Facility

The split loan involves dividing a loan into 2 parts. The one part will be charged at variable rates, while the other part of the loan at a fixed-rate. With this option, you are basically taking out 2 loans, with most banks only charging fees for 1 loan. There are a few institutions that charge a set fee when you decide to split the loan.

5. Portability

Loan portability is the feature which provides a way to maintain your loan when changing properties, which saves the hassles involved in refinancing your loan. It basically means that you change the security on the loan.

6. Switching Between Fixed And Variable

The switch facilities offer a way to switch the loan to a fixed rate to a variable rate, or the other way around. This can help you leverage your position should interest rates move up or down.

When it comes to applying for a business loan, and you need the money fast, then LoanOne can help. LoanOne is one of the fastest growing financial companies in Australia. We offer both personal and business loans with competitive rates to different industries. Our loans are fast, flexible and can be tailored to both your personal or business needs.