Be Aware Of This Before You Apply For Any Business Loan

A company loan might help you finance your next acquisitions, fund expansion, or manage any cash flow. You might have a rough concept of what any money lenders are looking for. If you are worried about missing out on any such criteria, let us assist you in removing the doubt.

This helpful guide contains everything you must know in Australia while applying for any business loan. But, before applying, you need to figure out which loan is right for you.

Capital Boost is a business loans Australia brokerage which is a Sydney-based company. They specialise in offering tailor-made unsecured types of business loans and a few other financial solutions for small businesses.

The following are a few things to do or know while applying for any business loan.

  1. How do loan providers assess any loan application?

They assess the following:

  • Trading history
  • Financial history 
  • Your credit history
  • Revenues and also other financials
  • Capital
  • Debt-to-income ratio
  • Assets or collaterals
  • Your purpose of this loan
  • How much amount involved
  • Interest rates.
  1. What are credit score requirements? 

Every business lender offers different minimum credit score standards. A credit score of less than 550 is usually considered below their minimum criteria. However, few lenders will lend to enterprises with lower credit scores.

  1. What loan type are you looking for?

Several types of business loans are available from where you can select from:

  • Secured loans
  • Unsecured loans
  • Invoice financing
  • Equipment finance
  • Business credit cards
  • Line of credit
  • Overdraft
  • Equity loan
  1. What is the rate of interest?

Select between any fixed or a variable interest rate. If you are confident in your ability to repay, a variable rate may be the ideal option for you. Any fixed interest rate can be more suitable for better cash flow management.

  1. What about fees and other charges?

Any business loans will come with different fees including

  • Administration fee
  • Underwriting fee
  • Loan processing fee
  • Exit fee
  • Establishment/application fee
  • Early termination fee 
  • Other service fees
  1. What documents are necessary?

The following documents are needed

  • Bank statements
  • Financial statements:
  • Sales/expenditure report
  • Business income report
  • Individual income report
  • Other debts
  • Share value
  • Latest tax returns
  • Statements of business activity  
  • Statements of Australian Taxation Office
  1. What questions a lender may ask?

The following are a few very common questions that a lender may ask:

  • Why are you in need of any business loan?
  • How much loan will you need?
  • How much are you able to repay and at what frequency?
  1. Can you afford to repay?

Before you apply for any business loan, you must know the possible rate of interest and then calculate the total sum that you can pay. Then you must assess whether you can afford the loan.  

  1. Who can help you in getting a loan?

You must find a few loan experts who can help and guide you in obtaining the right type of loan based on your current situation.

  1. Which lenders should you approach?

Also, you must line up a few lenders before applying for the loan.

Follow these above-mentioned factors while planning to apply for a business loan. 

Tyler Mathews

Tyler Mathews