Knowing you can access flexible business funding when you need it can you give you peace of mind and the confidence you need to run your business smoothly. Alternative lending in Australia is becoming increasingly popular with small business owners. However, there have been cases of misunderstandings with regard to the business loans offered in Australia. Here are the five common misunderstandings people have about business loans in Australia:
1. There are no options for small business loans other than banks
Some business owners misunderstand just how many loan options are available believing that banks are their only option. This is incorrect. There are an array of suitable options for small business loans other than banks.
Today, alternative lenders serve as a great option for small business owners by offering borrowers convenient and flexible business loans that can be used to meet a variety of business purposes such as purchasing inventory, purchasing equipment, financing new marketing campaigns, renovating a business premises, hiring staff, catering for unexpected business expenses, opening new stores and providing working capital.
Some of the types of alternative small business loans include a business line of credit, secured business loans, unsecured business loans, business equipment finance, invoice finance and business vehicle loans.
2. Procedures are extremely complex
Some people think that applying for a business loan involves extremely complex procedures. This is not true. The introduction of alternative financing in Australia has significantly changed the lending sector. Contrary to traditional bank loans, alternative finance has come in to offer more convenience and flexibility to borrowers.
Most alternative lenders, offer loan procedures that are extremely quick, simple and easy.
The process for getting a business loan from an alternative lender typically involves three simple steps including the submission of personal details, loan approval and the transfer of funds to the borrower’s business account. The submission of personal details can be done online and the application assessed on the same day. If the application is approved, the borrower can receive the funds in as little as 24 hours.
3. Repayment terms are very strict
Another common misconception is that the loan repayment terms are very rigid. This is incorrect. Most alternative lenders, offer affordable and flexible repayment terms tailored to the borrowers needs.
Marketplace lender Hubbe offer borrowers affordable and transparent repayment by tailoring the loan to the financial circumstances of the borrower’s business, specifically cash flow.
For example, most alternative lenders, give borrowers the flexibility to select repayment terms of between one and three years (depending on what suits them best) and leverage the redraw facility throughout the loan term.
4. Long assessment times and low approval rates
Most alternative business loans take a very short time to get approved following an application. Alternative lenders in Australia usually assess and approve the loan on the same day of application. This is one of the reasons why the popularity of alternative lenders is increasing.
Alternative lenders have also made it easier for business owners to take out loans with flexible loan assessment procedures and minimal paperwork.