Category: Personal and Business Loan News

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 dp 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 is 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 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 a 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 fast 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 the loan such as 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 on 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.

What’s The Difference Between Personal Loans and Business Loans?

business loan

There are plenty of loans available in the marketplace today for all types of purposes. As a result there is so much information and mumbo jumbo to cut through and sometimes it can be a case of analysis paralysis. At the end of the day it will basically come down to two things – are you using the line for business purposes or personal purposes? And what is the difference between the two? Let’s take a look now at the difference between personal loans and business loans.

 

Personal Loans Vs. Business Loans

So, what the difference between the two? Fundamentally there is very little difference between the two other than the purpose of the loan and what it is being used for. So let’s take a closer look at how each loan product works and what the differences are.

 

Business Loans

Since the dawn of civilisation, business loans have been used by entrepreneurs as a source of funding to help with business expansion, solving cash flow issues or to help overcome the many surprises that tend to arise in the course of doing business.

However, after the financial crisis of 2008, many banks and big lenders tightened their belts and became very picky about who gets credit and who doesn’t. As a result of this, many entrepreneurs have struggled to find reliable sources of funding for their businesses. Alternative lending came in to save the day by offering small business owners and upcoming entrepreneurs an alternative source of funding.

The main benefit of these non-bank lenders is that if you are seeking smaller amounts of finance, you can expect faster loan approval and minimal paperwork as the applications are all done online. This means you get access to your cash sooner so you can strike while the iron’s hot. In summary, the main consideration of a business loan is the business and not the individual who owns the business.

 

Personal Loans

When it comes to personal loans, the application process and requirements are largely the same as applying for a business loan. However, the purpose of the loan is more for personal matters. Personal loans are used for mostly for a holiday, home repairs, vehicle purchases or for buying a new household appliance. Or maybe you want to pay for a wedding or consolidate your debt. You can take a personal loan for any number of reasons. This type of loan involves the lender giving money to an individual and not a business.

Some of the main differences between business and personal loans are that personal loans are smaller and therefore generally do not require collateral. The main target of consideration is the individual and not the business. This can be both a good thing and a bad thing. If you have a good credit rating then you will not have a hard time getting a personal loan regardless of whether you have started your business or not. However, if you want to secure a business loan without having done any considerable business in the past, you may experience some trouble in the process. If your overall financials, time in business and revenue are all good, but your credit rating isn’t so good, this can also impact your approval chances. However, when it comes to underwriting for a personal loan, these factors may not carry as much weight.

ALSO READ: 5 Tips For Getting A Personal Loan Approved

 

Getting Personal

good credit standing

Personal loans do require good personal financials and credit rating – so do not expect any special treatment in relation to these requirements. The main idea here is to use your strengths to your advantage. Ask yourself, how I’m I more likely to secure a loan – as a business owner or as an individual?

 

Something Else You Should Know In Regards To Personal Loans

By securing a personal loan and diverting it to your business, you are inevitably mixing your business and personal financials. This may not cause many problems in the beginning but you may want to keep track of the two distinct financials carefully.

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

What Kinds Of Small Business Financing Are Available?

small business loans

If you are starting a new business or expanding an existing one, you might need to get financing and get it fast. If that is the case, you need to carefully consider the kind of financing you choose as this could seriously affect your cash flow.

Before you apply for financing, you need to consider the following:

  • determine the amount of financing you need
  • get a solid business plan developed
  • consider the time frame that you will need for repaying the loan
  • determine what your ability is for repaying the loan

Tip: Consult with your business adviser or accountant to get professional advice to help ensure you make solid financial decisions for your business.

 

Types of financing

There are two major types of financing that are available for your business – equity finance and debt finance. First let’s look at equity finance.

Equity Financing

Equity finance is where either your own money is invested, or the funds come from other investors, usually in exchange for shares or equity in your business.

The major sources for equity finance are:

  • Personal finances – using your own funds from selling personal assets or personal savings to self-fund your business.
  • Venture capitalists – these are professional investors who invest large sums of money (as equity) into businesses with the goal of achieving for high profit and/or growth potential.
  • Friends or family – you may offer friends or family to become a business partner or offer them a share in your company in exchange for capital investment. You really need to be careful with this option since a breakdown in a business relationship might affect personal relationships as well.
  • Private investors – also referred to as business angels, they tend to be wealthy people who are prepared to invest money into a business in exchange for a share of profits and return on equity. These people are rare and hard to find.
  • Crowd funding – this involves a large group of individuals collectively raising capital, mainly through online crowdfunding or social media platforms. It enables investors to offer large amounts of money in exchange for equity shares or for a reward such as a first-run products or other business perks.
  • Crowd-sourced equity funding – this is a means for small businesses and start-ups to raise money via the public. Usually they rely on raising small amounts of money from many investors. Every investor may invest as much as $10,000 per year in a company, and in exchange receive shares.
  • Government – a majority of government assistance that is available for small businesses is in the form of low cost or free advisory services, guidance, or information. However, in certain circumstances you might be eligible to receive a grant, for exporting, innovation, research and development or business expansion.

 

Debt Financing

If you are unable to achieve any of the equity funding options listed above, then you are left with no option but debt finance. This is money that is borrowed from a bank or non-bank lender, or other types of external lender. It is actually not unusual for a business use a combinations of both debt and equity financing. The main debt finance sources are:

  • Financial institutions – this includes institutions such as building societies, credit unions, and banks. Financing may be provided in the form of a loan, line of credit, or overdrafts.
  • Retailers – buying goods for your business on store credit through a finance companies. Unfortunately, these options may require little to no upfront payment, but often have high interest rates. However, an interest free period is offered by some retailers but you must be disciplined in maintaining your cash flow to avoid having to pay any unnecessary interest.
  • Suppliers – when you have trade credit from suppliers it allows you to pay for goods at a later date. Not everyone has the ability to chose this option as it is really dependant on having a good relationship with the particular supplier. If you don’t have a track record, this makes this option almost impossible.
  • Peer-to-peer lenders – this type of service matches individuals with money who want to invest with individuals looking to borrow money. These loans usually need to be repaid within in a certain time frame. The interest rates can vary according to how much risk is involved.
  • Friends or family – might offer to loan you money. In order to avoid any misunderstandings it is very important to get a formal written agreement in place that specifies the loan terms, interest rate, and repayment requirements Seek legal advice on how to draw a loan agreement up.
  • Non-bank lenders – There are a number of online non-bank lenders to choose from that offer fast, simple and inexpensive finance options. LoanOne is one of the fastest growing financial companies in Australia who fall into this category. We offer both personal loans and business loans with competitive rates for different industries. Our loans are fast, flexible and can be tailored to both your personal or business needs. So if you’re stuck using traditional finance options, LoanOne can help you.

Fundamental Facts About Loans For Small Businesses

small business loans

As you go about selecting the right small business loans, it is wise to gather as much information as you can about the range of options that are available to you. Australia boasts a wide range of lenders that cater to small businesses, all of which offer various types of loan products. As such, prospective borrowers need to familiarize themselves with extensive information in order to make the best choice for their business. Therefore, this article is a comparatively brief summary of some of the key factors to consider when seeking a small business loan.

Preferred Method Of Accessing Loan Funds

One of the most crucial factors in selecting a specific type of small business loan will be the frequency and timing of when you want to access the proceeds of your loan. Borrowers who wish to obtain the entire loan amount upfront as a way to purchase business capital or expand the enterprise should pursue a “fully drawn advance.” Businesses needing a solution for temporary cash flow concerns should seek a loan that is structured as a line of credit or as overdraft protection.

Desired Loan Terms

A loan that is disbursed on an upfront basis will be repaid in installments comprised of a percentage of principal amount together with interest. The precise amount required at each interval will be determined by the stated term or duration of the loan. When choosing a small business loan, it is therefore necessary to make honest calculations about the size of installment payments you can comfortably make. While a longer loan term will mean lower repayments, the total cost of the loan including interest will be greater.

Collateral And Security

Small business loans that are secured tend to be somewhat less expensive, but the downside is that collateral will need to be pledged in order to obtain a more favorable rate. Security for a loan of this type could be in the form of business assets, personal property or alternative types of collateral. Though a secured loan product will carry a lower rate of interest, failure to pay in a timely fashion can result in the seizure of the pledged assets. This is why many small business owners are hesitant to pledge their own residence to get a loan in Australia.

Interest Rate Structures

Small business loan products in Australia will either have a fixed interest rate or a variable rate. As the name would suggest, a fixed rate is one that does not change during the life of the loan. A variable rate fluctuates along with the broader financial market. Lenders assume the risk of market changes for fixed rate loans, but in the case of a variable rate loan, the borrower bears the risk. Variable rate borrowers may ultimately pay less in interest during their loan terms, but there is always a chance that unexpected rate interests will make repayment difficult.

Lender Fees

Institutions offering loans to small businesses will have their own fee structures in place, and these may encompass application fees, fees for early repayment, establishment fees, maintenance fees and more. Though a particular some lenders may boast a low interest rate, it may be that their fee structure makes the loan more expensive than a product offered by a lender with a higher rate but fewer fees. The key is to make a careful calculation of the entire cost of a loan and the required monthly payments in order to avoid unpleasant surprises and hidden fees.

Documentation Required

Certain types of lending institutions in Australia, particularly banks, will want to receive highly specific business plans from those seeking a business loan. This documentation usually includes cash flow forecasts, financial history, profit and loss statements and the like. This can be time consuming and complicated making the situation a complete turn off.

Companies like LoanOne make the documentation process simple to follow. LoanOne is one of the fastest growing financial companies in Australia and are here to make the loan application process fast and easy. 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. Apply now by clicking here.

Credit Cards Vs Personal Loans – What’s the Real Difference?

credit card vs personal loans

Credit cards or personal loans – the debate over the pros and cons of these two financing options still rages on. On the one hand, credit cards offer an easier and a much more convenient means of borrowing. However, they tend to be more expensive and, therefore, their popularity is waning. On the other hand, personal loans are much cheaper, albeit they are a tad less flexible than credit cards. Nonetheless, generally, the best financing option depends on what you plan to spend the money on as well as the personal discipline you have when it comes to repaying.

On the whole, Australians like to spend. As a country, we have stacked up about $100 billion in debts emanating from personal loans and credit cards. Credit cards and personal loans make it easy to access cash when you don’t have any savings and they both offer different features that make them suitable for different circumstances. A good example is the structure of each product. Credit cards are structured in as a line of credit-style account which offers users regular access to smaller amounts of money as they need it. On the other hand, personal loans offer lump-sum access to money, usually meant for a particular reason.

Either way, one thing that can’t be avoided is the fees and penalties. As such, each of these loan options needs to be handled with caution.

According to the figures given by the Australian Prudential and Regulation Authority, in December 2012, personal loans had totalled about $58.6 billion while outstanding credit card bills totalled $40.8 billion. Furthermore, it has been openly published that financial services providers charged an average interest rate of 13% for personal loans and 17% for credit cards.

 

Counting The Cost

One of the reasons that personal loans are more attractive is that they have lower interest rates when compared to credit cards. Their repayment schedule also makes it easier for debtors to fully repay their loans, eventually. This means that in the long run, personal loans are cheaper. They also come with greater strictness in terms of repayment terms, which sees the loans cleared within the agreed time frame. Furthermore, with personal loans, the temptation to keep spending is lower due to the fact that very few loans offer redraw options. With this in mind, personal loans are far better when making a one-off purchase such as furnishing a new house, financing home improvements projects or taking an overseas holiday.

On the other hand, the convenience that credit cards offer allow their users to spend immediately as needed. This is great when it comes to emergencies. Credit card users really need to consider whether they have the cash flow to make the repayments as soon as possible or whether you will likely keep spending, going further into debt.

When it comes to personal loans, LoanOne is there to help you. 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. For fast approval please click here and apply now!