How to get help for your business with a business loan

Man starts to sign on a business loan

More than two-thirds of business owners are struggling to keep up with their bills, a recent survey conducted by fintech company Thriday finds. 

Of over 200 small enterprises surveyed, 42% of them have felt the impacts of inflation lifting their operating costs and reducing profit margins. 

Additionally, 92% of businesses are under the pump and believe the effects of high inflation will linger for at least another 12 months. 

So to keep the engine running, almost a quarter of companies have laid off their staff.

These are tough times for some small business owners. But if you’re searching for ways to help with expenses, a business loan could be one of them. 

Business needs: cash flow, equipment costs and hiring

Worker writes on his clipboard as he takes stock of inventory and considers a business loan

A business loan can be used for many purposes, including improving your organisation’s cash flow, obtaining equipment, or hiring staff.

So if high inflation has made the running costs of your business too much to manage for the time being, a business loan could take away some pressure. It’s also a helpful option if you’re planning to grow your business and need funds to cover the cost.

In saying that, there are a number of features to be aware of when it comes to business loans. Let’s have a look.

Common financing types in a business loan

Papers are strewn across a table as a few people work out the costs of a business loan

The first thing you might want to give some thought to is the type of interest rate that would suit you. You can generally expect to find a fixed rate, or a variable rate. Here’s what you’ll encounter with the two interest rate types:

  • Fixed rate. While interest rates are usually higher with this option, you can rest easy knowing that the amount of interest you’ll pay on the loan will be the same with each repayment for a fixed period of time. It’s especially useful if you keep to a stricter budget.
  • Variable rate. You can typically get access to more features with this option, like the ability to make extra repayments on your loan. The downside is, your interest rate is subject to change and can sometimes be higher or lower than a fixed rate. But if there is some flexibility to your budget, this could be an option to consider. 

You might also think about whether a secured or unsecured loan is better for you. Here’s a brief summary of the two loan types and what they mean:

  • Secured loan. This means putting up a valuable asset against the loan as collateral, like a commercial property or equipment, for example. The benefit is that interest rates tend to be lower, and you may be able to borrow a larger sum of money. However, you do run the risk of having this asset seized if you default on the loan. 
  • Unsecured loan. While no assets need to be put up as collateral, interest rates are generally higher and you’ll need to have a good credit score to receive funding. The upside of an unsecured loan is you can possibly expect the application process to be fairly quick and you won’t have to worry about losing any assets. 

Then there are the fees attached to the loan which may be upfront, ongoing or both. Although, some lenders do offer reduced fees, which means less out of your organisation’s pocket when taking out a business loan. 

As a loan is a big financial commitment, it’s important to do your research and shop around to get an offer that best meets your needs.

So if you’re looking for some financing options but don’t know where to find them, check out our business loans comparison page, or start comparing your top picks below.

Business loans comparison table - rates updated daily

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  • Featured Product
    Boost Business Loan

    Whether you’re looking for a quick cash boost for your business or are ready to invest in growth, ScotPac offers a range of unsecured and secured loans from $10,000 up to $500,000. For loan terms of 6 months to 3 years. No application or account keeping fees to pay. Funds available in 24 hours or less once approved. Repayment options available.

    Interest Rate
    Upfront Fee
    Funding speed
    On application
    Details on application
    From 24 hours
    Details
  • Business+ Unsecured Loan

    A simple way to fund your business’s big plans. Borrow up to $50,000 without using your assets as security. A fixed interest rate means your repayments don’t change over the life of the loan. Apply in minutes with the Business app. Enjoy a fast approval process. $495 establishment fee.

    Interest Rate
    Upfront Fee
    Funding speed
    Rates range from 11.95% p.a. to 22.95% p.a.
    $495
    Varies
    Details
  • Unsecured Business Loan

    Business Loans from $5,000 to $5,000,000 with high approval rates. Access to funds on loans up to $500,000 in as little as 3 hours. Cash flow friendly repayments and open minded offers.

    Interest Rate
    Upfront Fee
    Funding speed
    On Application
    3%, starting at $399
    from 3 hours
    Details
  • Unsecured Business Loan

    A straightforward business loan with no hidden Lumi fees or charges. Speedy application and approval process with fast access to funds according to Lumi.

    Interest Rate
    Upfront Fee
    Funding speed
    from 9%
    -
    Within same day
    Details

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