How to Find and Compare Unsecured Business Loans in Australia
We live in times of a great crisis and looking for unsecured business loans in Australia might be the only thing that can help many SMEs to get through it. Banks have either stopped loan origination entirely in response to the economic recession or made their eligibility requirements a lot stricter. Therefore, alternative lending has become even more popular. But you must remember that it’s essential to compare unsecured business loans and research every provider thoroughly. The terms offered by alternative financing providers vary greatly and a detailed online lender comparison will allow you to choose the option that will be best for you in the long term.
What You Can Expect from Unsecured Business Loans in Australia
An unsecured loan is exactly what the name states. It’s a loan without security, meaning collateral. Therefore, a lender takes a greater risk by providing this type of financing. They are unable to withhold the collateral if the borrower defaults on the loan. Banks usually provide only secured loans, meaning that in order to get them the borrower must have some collateral. The security is an asset of an equivalent or surpassing value. In the majority of cases, these loans use property, cars, or other large assets as collateral.
The main benefit of using unsecured business loans in Australia is the fact that they are available to companies that don’t have the necessary security. As more businesses now are dealing with the “intangible”, like software development and are online-based, they might not have the required assets in the first place.
Moreover, unsecured business loans in Australia are always:
Quicker to get.
You might get approval and money in your account in less than 24 hours.More accessible.
They are even often available to businesses with a less-than-perfect credit score.
Unsecured loans also, almost always, have lower upfront costs. However, due to the high risk to the lender, interest rates and the overall cost of the loan will be higher compared to a secured one. That’s why it’s so important to compare business loans of this kind. Some of them might have exorbitant costs and heavy restrictions on payments. Therefore, you might not be able to pay off the debt faster. You also might end up paying over 100% of the amount you borrowed by the end of term.
Why Are Unsecured Business Loans in Australia More Important Than Ever Now?
The simple truth of the situation is that the lockdowns and global economic recession hit SMEs extremely hard. A great number of small businesses have shut down already and many more might follow. The lack of cash flow and declining revenues are the main reasons for this. Therefore, it’s unsurprising that so many small and medium companies are now looking for unsecured business loans in Australia.
However, there is also another issue to consider. The COVID-19 crisis of 2020 has had a huge impact on the world as a whole. One aspect of this impact was a major change in consumer behaviour worldwide. An increased preference for digital services is an easily predicted outcome. But the more important change is the consumers’ rising interest in value shopping.
For small business owners this means that they now must focus on making their brands more consumer-friendly. It’s also essential to build a conscious brand that will become an important part of the community. Remember, consumers are now looking for value not only in the products they buy. They are looking for valuable experiences and a deeper connection with the brands they buy from. In response to this, businesses have to adjust their marketing strategies and invest in data analytics. Today it’s imperative to deliver a highly personalized experience to every customer. Therefore, one might need a loan just to afford the software and services necessary to establish the necessary level of customer experience.
That said, the main reason to compare business loans from alternative lenders now is that the majority of SMEs cannot get secured loans. Either they don’t have what’s necessary to use as collateral or they can’t get approval from banks. Unsecured loans are faster and easier to get, for the most part. Therefore, they are more popular now.
Main Factors to Consider When You Compare Business Loans
When making your own online lender comparison you need to pay attention to the following:
Maximum loan amount
Interest rates
Features
Lender’s credibility and reputation
Client reviews
Remember that the online lending industry is poorly regulated. Therefore, it has a rather high rate of scams. You need to compare business loans very carefully and research the lenders in order to avoid problems. You can do this yourself or save time by using the services of online lender comparison platforms.
Benefits of Using Online Lender Comparison Platforms
One of the most effective ways to compare unsecured business loans in Australia is to use a specialized service dedicated to it. Business Loan Marketplace, Become, or Lend.com.au all offer a similar type of service. Essentially, these marketplaces match you with the best lender based on your loan requirements.
The client (meaning the business owner) needs to fill in a small questionnaire in order to determine what loan they need. Then, the platform, which is connected to all lenders, sends out a multi-application on your behalf. Finally, the client gets matched with the best lenders that meet their requirements.
The process is straightforward and quick. However, you need to be sure that the platform you are using can be trusted. To evaluate the quality of the online lender comparison it offers, check if it considers the following factors:
Ease of accessing the loans (compatibility)
Product offering
Lender credibility
Client reviews
Business finance rates (interest, origination, overdraft, and factor rates)
Asset finance
Online Lender Comparison: Best Alternative Lenders in Australia
· Prospa.
Prospa is one of the best providers of unsecured business loans in Australia. It offers secured and unsecured loans as well as a line of credit. It has issued over $1.5 billion in loans funding over 29,400 businesses and has a 4.9 out of 5 review rating. The maximum loan amount is $300,000.
· Capify.
Capify is one of the smaller providers in a top online lender comparison. However, it is reliable and trusted by clients (4.7 out of 5). The maximum loan amount it offers is $300,000 but it doesn’t offer a line of credit. The company has funded over 8,500 businesses so far.
· GETcapital.
GETcapital is the top provider of large unsecured business loans in Australia and worldwide. Its business loans are valued at over $13 billion and the maximum amount is $750,000. The company has funded over 110,000 businesses all over the world and has a 4.9 out of 5 rating according to customer reviews.
Bottom Line: Do Not Rush When Choosing Unsecured Business Loans in Australia
Obtaining the necessary financing for your small business will definitely reduce your stress levels in this crisis. However, you need to understand that unsecured loans and lenders vary greatly. Unfortunately, some of them are literal traps that can sink your business. Therefore, you should take your time and compare business loans very carefully. Research every detail of the Terms and Conditions and be sure to read the fine print. These loans are more expensive and high-risk by default. You need to be sure that you pick the best possible option that won’t fail you in the long term.