Small businesses form a major part of the Australian business economy. In fact, there are various types of small business in Australia.
By small businesses, we refer to businesses that comprise of 5 -19 employees in its workforce. A number of less than five and more than one makes it a micro-business, while businesses comprising of more than 19 and up to 200 employees are referred to as medium businesses. And lastly, businesses having more than 200 employees are considered to be large businesses.
Although small businesses generally comprise of sole entrepreneurs, micro-businesses and organisations are at the lower end of medium enterprises’ category. The scope of growth and diverse directions in this type of business is unlimited. With prudent planning, proper implementation of the plans and streamlined funding, small businesses can be majorly successful in a thriving and versatile market.
However, sourcing and accumulating sufficient capital for the purpose of small businesses’ growth and operation is a difficult and complicated task. While small business lending has been extremely popular in recent times, financing for expansion or initiation of small businesses still remains a major concern for most owners.
While most small businesses require capital sourcing or funding in the form of various small business loans, most need it due to a requirement of upgrading technology, innovation purposes and debt financing. Small businesses although face major challenges in sourcing capital. This is due to several reasons.
- Lack of capital or funds with the owner/entrepreneur
- Most lenders, like banks and trade unions, have strict approval criteria that these businesses cannot meet
- These businesses fail to provide any collateral, like business and personal assets in the form of mortgages
- A sudden need for upgrading or development
- Most of these businesses do not have a solid track record or a long track record of performance and revenues that are checked by banks, etc.
Due to these, small businesses looking for fast business loans in Australia are attracted to alternate financing. For this reason, there are a few trends that we will be excited and interested to observe in 2020.
Popularity of alternate financing in Australia
Alternate financing platforms, like Hubbe, have become extremely popular amongst small businesses for their convenience and fast loan approval process. Along with that, alternate financing provides easy unsecured business loans to organisations that are in need of funding. While traditional lenders ask for several documents, collaterals and have a lengthy and complicated approval process, alternative financing provides small business loans requiring few basic details and has fast and easy approval methods.
Transparency of lenders
With the advent of alternate financing, loans and financing are about to become more transparent and seamless, allowing borrowers to choose the best deal for themselves. These agencies, like Hubbe, provide various forms of small business finance options with completely transparent terms and loan approval details making the acquiring of such loans for businesses an easy and preferable task.
Funding and financing for small businesses are to become extremely quick and hassle-free with the help of alternate finance agencies that provide fast business loans, with the easy approval process and suitable loan terms.
With alternate financing options, repayment methods have become more flexible and convenient for borrowers unlike small business loans provided by traditional lenders. These traditions lenders come with rigid repayment and loan recovery policies.
P2P lending has gained more popularity with the advent of alternative financing platforms, like Hubbe. With the help of these platforms, borrowers and lenders can choose each other according to their requirements. Various tools help the borrower identify the most suitable deal and lender and the agencies provide assistance in closing such deals.