I'm Jason Birks, a Brisbane mortgage broker. I spent over ten years lending at Westpac and NAB before starting Birks Financial Group, and I compare more than 60 lenders. I work with business owners to find lending that fits where the business is headed.
The main types of business finance
- Secured business loans. Backed by property, often your home. Lower rates and longer terms, so they suit larger amounts and longer-term purposes.
- Unsecured business loans. Based on the business's cash flow, with no property security. Faster and simpler, but at higher rates and over shorter terms.
- Overdrafts and lines of credit. A limit you draw on and repay as needed, useful for smoothing out seasonal cash flow.
- Invoice finance. An advance against unpaid invoices, so you aren't waiting 30 to 90 days for customers to pay.
- Asset finance. For vehicles and equipment. See asset and equipment finance.
What business loans are used for
- Starting or buying a business
- Expanding, hiring or opening a new location
- Stock, materials and working capital
- Refinancing expensive business debt
- Paying an ATO debt on a plan that suits your cash flow
What lenders look at
- Trading history. Most lenders want at least six months to two years of ABN history, depending on the product.
- Turnover and cash flow. Shown through BAS, business bank statements or financial statements.
- Security. Property security lowers the rate. Most business loans also need a personal guarantee from the directors.
- Credit history. Both the business's and the directors'.
Questions people ask
Can I get a business loan without property security?
Yes. Unsecured loans are based on cash flow, usually up to a limit set by your turnover, at higher rates than secured lending.
How quickly can I get a business loan?
Some unsecured lenders can approve within a few days. Secured loans take longer because of valuations and legal work.
Can I get a loan to buy a business?
Yes. Lenders look at the business's financial history, your experience and the security on offer. Expect to contribute a deposit.
Will a business loan affect my home loan?
It can, because lenders count your business debts and any personal guarantees. I'll structure both so neither blocks the other.
Is it hard to get a business loan in Australia?
It depends on your trading history, cash flow and security. Businesses with at least a year or two of trading and good records have the most options.
