How a business loan can help start or support a small business
Starting a new business is never a walk in the park. From conception through to execution, you need a lot of patience and planning so you can turn your dream business into something that’s sustainable and profitable. It’s a tough world out there - the sad reality is that statistics show:
- 60% of businesses will fail in the first 3 years, and of those, 50% are actually profitable
- Of all new businesses started 4 years ago, 46% are no longer operating and one in three no longer exist
And yet, establishing and growing your own business can be the best financial decision you’ll ever make. Of course, there’s the matter of funding - in many cases, you may need more than you anticipated, and if you’re considering finance to make it happen, then a business loan may be just what you need. Whether you're looking to start your own small business or you need a quick cash flow boost - here's a few things you need to know about business lending.
You’ll have backup capital
Start-up businesses always need backup capital until they can create a strong cash flow. Taking up a business loan means you will have a lump sum amount to prop you up if you encounter a cash flow stumble on the journey of building your small business. You can use the funds to cover any costs, such as buying stock or raw materials, purchasing equipment or tools, investing in digital marketing or paying your employees.
It’s easy to apply
The early stages of starting a business are one of the busiest times for budding entrepreneurs. So finding the time to process a loan application can seem pretty challenging. But the reality is that you can pretty much do it all online – just submit a few details and evidence of income, and you’re all set.
It’s quick to get the funds
Online business loans are quick loans, and that means you can have the funds exactly when you need them - as most lenders typically release the money within 24 hours of approval.
You may need some security
Some lenders may require an asset to use as security for a business loan. The asset could include property, a motor vechicle, inventory or business equipement - and the asset value will need to cover the loan amount if you are unable to pay the loan back. Conversely, some lenders may not require a physical asset to secure the loan. Instead they may look at the strength and cash flow of your business as security.
Extensive financial history may not be required
There are a number of factors that could impact your eligibilty for a business loan including your trading and credit history, your income and affordability (can you comfortably afford the repayments) and experience. Irrespective of whether your busness is a start up or an established business, most lenders will require proof of income, a 90-day bank statement, and ideally, a rock-solid business plan.
So if you are starting a new business, you will probably need to keep your current job so the lender can use your wages to assess your income and affordability for the new business loan. This can make it hard to juggle your job and new business venture at the same time, but once your business income exceeds your wages, you can then consider dropping your job and living the dream of being your own boss permanently.
It’s flexible
It's common knowledge that most new businesses take a while before they start getting a return on investment. A business loan gives you the flexibility of choosing the loan term and repayment frequency, depending on the amount you borrow. And with the right management of your business finances, you may be able to make your repayments without a noticeable impact on your cashflow.
Predictable repayments
With so many things going on when you’re starting or operating a business, it helps that a business loan has a fixed date and fixed repayment amount. As long as you set up a reminder in your calendar and set up recurring payments from your business account, it will be hard to miss. Remember that missing a payment will create a chain of events involving your loan and credit score, so a recurring payment plan is the smartest way to go.
Business loans made easy
Here at Safe Financial we make the business loan application process super easy! It's all online and you can borrow from $1,000 to $10,000 - you can even calculate your loan repayments before you apply, so you'll know if the loan you want is right for you.
Good luck with your business
A small business loan is an excellent option for funding your new businesses to get it up and running, or to help grow your current business. So, if you’ve got a great business idea that just needs a little financial help to turn it into reality, or you simply need to access some fast cash to help with your business cash flow - we're here to help. Just take a look at our business loans up to $10,000 to find out how quick and easy it is to get your hands on some extra funds. Once a loan is approved, the cash is usually in your bank account within a few hours – so you can focus on your business without worrying about how to financially make it happen!