Startup Business Loans: Different Ways to Get Your New Business Financed

Australia’s booming business environment is the perfect launchpad for innovative start-ups. New businesses excel each year, raising funds from different sources to fuel the flight of their dream ideas. The total funding for Australian start-ups in 2021 crossed $10 billion. These numbers are promising. However, that does not mean that it is easy to raise funds for your business. Every start-up founder knows that business financing is a big hurdle they have to cross. That is why the support of a top finance broker can be essential to navigating the world of start-up business loans. Let’s look at some different ways of getting your business financed.

Getting Business Loans for Start-ups in Australia: Conditions to Keep In Mind

The eligibility for business loans typically depends upon the following three conditions:

• The business possesses an active Australian Business Number (ABN)
• The entity has been operational for at least six months
• The firm has a trading income of at least $5000 each month

However, Australia has options that do not require start-ups to have minimum revenue figures or existing operations. A finance broker can evaluate your business needs and recommend financing options that suit them.

Ways to Get Loans for Start-ups in Australia

Here are the various ways to get business funding:

1. Unsecured Loans: Start-up founders love this option because it does not require them to offer security for getting a loan. The abovementioned criteria apply to unsecured loans. A start-up can get an unsecured loan based on its cash flow. The owner’s creditworthiness is also a critical factor. There are low-doc approval options up to $300,000.
2. Secured Loans: If your new business has assets, you can consider getting a secured business loan. This option offers up to 80% of the asset value as a loan. Having an asset can get you a better loan deal from financiers.
3. Line of Credit: Start-ups with short-term cash flow issues can rely on lines of credit. You must have a history of operating for at least 12 months, with a minimum of $10K monthly turnover. A line of credit is a facility where you have a pre-approved limit. You can draw as much cash as you need within that limit. You can get a line of credit with minimal documentation for up to $300,000.
4. Chattel Mortgage: Start-up businesses can buy a new asset with a loan, on the condition that this asset is given as security to the loan provider. This mortgage strategy is excellent for business owners who need to purchase assets without upsetting their cash situation.
5. Invoice Financing: If your business has unpaid invoices outstanding from your buyers, you can use them to get a loan. The loan repayment happens when buyers clear their invoices. Interest is applicable on the outstanding amount after the agreed period.

These were only some ways of start-up financing for business owners in Australia. If you want to explore tailor-made financing solutions, contact Broc Finance, one of the leading finance brokers in Down Under!