Unsecured Business Loans

For some small business owners getting fund for new business is like a logistical nightmare. Not every business can afford to have the entire capital money available at once and hence, depends on loans. However, when it comes to a start-up, loans aren’t sanctioned so easily because of the lack of goodwill and collateral. And even if the loans are sanctioned, the disbursed amount isn’t always as desired.

And this is where unsecured loans come into the picture. Unsecured business loans in Australia are the easy business loan options that come with several benefits and can help you to take your business to the next level. The application of such loans do not attract any collateral against the disbursed amount. This makes it easier for new businesses to get hold of the desired capital fund even when there is nothing to offer as security.

An unsecured business loan is a loan that:

  • Requires no collateral
  • Utilises a financial product that lends against the cash flow of your business.

Hubbe helps Australian businesses in meeting their funding needs with fast small business loans. You can focus on business plans for your business expansion by starting off with our simple and fast loan application process.

How we help you to get the Best Unsecured Business Loans in Australia

At Hubbe we have partnered with various leading lenders across the country to help your business find the perfect solution that matches your business finance needs. We are known for fast small business loans approval process. We help you in connecting your business to a hub of lenders which enables you to choose from a wide variety of offers from all the different lenders. As soon as you decide to move on with the deal of your choice the credit team will assess your application and provide you with a decision within hours. If fully approved you will be notified and instructed on the terms and conditions, also the loan agreement will be sent to you electronically to review, sign and send back electronically. Once received with all your banking details, the funds will be released and credited into your account. This entire process is very swift and you could have the funds in your account in as quickly as 24 hours.


Why use Unsecured Business Finance?

You don’t need to tie up your assets to access the business funding you need.

Reduced Risk

You’ll be able to take out an unsecured business loan without the stress of putting your assets at risk. It can also act as a viable, accessible option for businesses with little or no tangible assets.

Quick Access to Capital

Compared to other financing options, unsecured business finance can be assessed and approved faster. This is because they don’t require any security. The majority of our lenders strive to complete applications within a short period of time.

Affordable Repayments

The lender will endeavor to make your loan repayment affordable and transparent by building your loan based on your businesses financial circumstances.

Calculate your business loan repayment>>

Specialist Lenders

We will help you find the best and most accomplished unsecured business loan lenders, which will ease your loan approval. Furthermore, you will get significant help from the lenders as they have vast experience in assisting businesses similar to yours.

Secured vs. Unsecured Loans

When you’re searching for the right business loan, you’ll be faced with two choices: an unsecured loan or a secured loan. What’s the difference? An unsecured business loan is a loan made to a business without collateral. A secured small business loan is a loan made with something used as collateral for the lender to recoup the losses if the business defaults.

Collateral

Secured — Collateral is a must. Typically it is something of value equal to that of the loan amount. It acts as the insurance for the lender.

Unsecured — Unsecured small business loans are given without any security from the borrower other than their credit rating and the financial strength of their company. A lender would judge their ability and history of repaying debt.

Rates & Terms

Secured — As secured loans are less risky, hence often the interest rates are lower than other types of loans. They are also typically longer-term loans than an unsecured loan. The amount of the loans will vary based on the amount of collateral available, but can be very high.

Unsecured — Unsecured loans are considered short-term streams of financing. To minimize the risk exposure, the lenders allow a tighter re-payment schedule for the borrowers to adhere to. Flexible repayments include daily, weekly, fortnightly or monthly repayment options.

Unsecured Business Loans for New Business

  • High approval rate for new business owners with a registered ABN and trading for more than 6 months.
  • Easy approvals of an unsecured business loan by demonstrating the ability to repay the loan.
  • The key benefit of unsecured loans is NO collateral or security is required, protecting your assets.
  • Unsecured Business Loans are usually used by businesses for general cash flow purposes.
  • The advantage of using unsecured business loans is fast settlement within 24 hours.
  • With unsecured business loans the lender takes into account the cash flow being generated by the business to provide an approval.

The Advantages of Unsecured Business Loans:

  1. No collateral required.    
    An unsecured loan doesn’t need security. Consequently, this minimises the risk of losing your personal or business assets in the event you default on loan repayments. This distinguishes it from secured loans, whereby you can only be granted a loan in the by providing security, which could later be used to compensate for loan default.
  2. Amount of loan not constrained by the value of an asset.
    To access a particular secured loan amount, you need to provide security that is of higher value than the loan amount that you wish to borrow. The loan amount to be offered generally ranges between 60 and 70 per cent of the asset market value. Conversely, unsecured loans are not issued in regard to the asset market value but based primarily on the credit score of the borrower.
  3. Faster turnaround time.
    Lenders can complete and process the application of unsecured loans online without having to evaluate the value of a borrower’s physical asset. This significantly boosts the turnaround time making it possible for borrowers to access funds in less than 24 hours after competing their applications. The swift turnaround time turn out to be useful when you need to access cash urgently
  4. Builds up your credit history. 
    Unsecured business loans can be used to build credit history, which can be beneficial when applying for future loans. You only need to repay your loan installments on time to improve the credit history of your business.
  5. Your business assets are safe.
    Since an unsecured loan is issued without hypothecating collateral, lenders are unable to seize your business assets if you fail to pay off your loan. This consequently secures your assets.

Cons of Unsecured Business Loans

    1. Higher rates of Interest.
      Generally, unsecured loans pose a lot of risk to lenders since there is no collateral to be used as compensation in the event borrowers are unable to pay off their loans. As a result, lenders are prompted to charge higher interest rates as a method of compensation. The rate of interest depends on various factors such as the time in business, industry type, cashflow and the risk profile.
    2. Smaller loan amount.
      Since there is no security provided; lenders may not be willing to risk approving large funding amount for unsecured loans.
    3. Shorter Tenures.
      Unsecured business loans usually have tighter repayment schedules purposed to reduce the risk exposure for lenders.Flexible repayments include daily, weekly, fortnightly or monthly repayment options.
    4. Liability.
      Despite the favorable requirements and terms during application, an unsecured loan must be paid on time to have and maintain a good credit score.
    5. Loan eligibility
      You don’t need to put your assets at stake when applying for unsecured business loans.The business must be trading for at least 6 months under an ABN an should be generating at least $5000 in revenue per month.Conclusively, unsecured business loans can be the best, or the worst choice for you — depending on several variables including your financial condition, credit score, the purpose of the loan etc.  As such, it may be a good idea to sit down and discuss your requirements with your accountant on what is best for your business or alternatively, you can call 1800 864 769 for an obligation free consultation with a lending consultant.

 

Check your business loan eligibility >>

 

Small businesses can use the Unsecured Business Loan towards

  1. General working capital
  2. Purchase stock in bulk to get bulk discounts
  3. Deposit for shipments of stock, equipment etc ordered
  4. Tendering for projects
  5. Buy an existing business or open up a new branch
  6. Consolidate Debts
  7. Marketing Expenses and advertising
  8. Pay wages during peak season
  9. Renovation on refurbishments expenses

Common reasons why unsecured business loans application are rejected

Since unsecured business loans do not attract any collateral, the financial risk on the lender is higher, thereby resulting in a higher rate of rejection. The rejection of application can be due to a plethora of reasons, including

    • Failure to meet annual turnover requirement: This is a common cause of rejection of unsecured business loan application. The primary eligibility requirement is that the business should have a minimum annual turnover.
    • Age of the business: The age of the business is another decisive factor. Though the loans are sanctioned without any security, the applying business should have at least some tenurity in its field to be eligible.
    • Poor credit score: Defaulters in loan repayment attract a negative impact on the credit score. Hence, this might cause the lender to reject the application.
    • Weak cash flow: In order to bag an unsecured loan, the cash flow of the business should be strong so as to ensure timely repayment without defaults.
    • Incomplete form submission: At the time of duly filling up the form, all the required details and documents need to be furnished. Incomplete form or insufficient documents may be a big cause of rejection.

Other Small Business Financing Options

Aside from an unsecured business loan, merchant cash advances and lines of credit are also viable options for financing.

A Merchant Cash Advance exhibits an innovative substitute for a conventional small business loan. It helps you meet your business objectives by allowing you to access the working capital from the lender, who basically uses your projected future debit and credit card sales to offer you working capital.

The benefit of using an MCA is the flexibility aspect. It allows you to repay your advance based on the daily sales income. During the repayment period of your advance, a small percentage of the debit/credit card sales is retained until you complete paying off the advance. Repaying based on your daily sales income enables you to make smaller payments in the wake of a cash flow slowdown.

You may need a Merchant Cash Advance if:

  • You need flexibility
  • Your business accepts customer payments in the form of credit cards.
  • You need a simple and swift financing solution.
  • Your sales fluctuate
  • You’re not interested in paying monthly minimums.

An merchant cash advance allows you to qualify for business cash advances based on factors including the repayment potential, past credit history and the existing business volume.

The short and simple approval process makes merchant cash advances an easy and convenient way of accessing funds. When applying for a merchant cash advance, you should keep in mind that lenders will be looking at your credit score to calculate the loan you can access at that particular time.

If you have a higher credit score, you are likely to qualify for a higher amount of money accompanied by a lower interest rate while if your credit score is lower, you are likely to qualify for a lower amount of money accompanied by a higher interest rate.

You can access an agreed amount whenever you need it. A business line of credit entitles you to pay interest only on the funds drawn, not on the entire facility.

Some finance companies also offer similar services called lines of credit to certain types of businesses. Hubbe can assist you in getting fast, flexible funding to business that needs it. For businesses looking for funds to get in on an amazing deal on inventory, or needing to ramp up personnel for an upcoming promotion, lines of credit can make things happen. That new piece of equipment to make your business more efficient can be a reality with a line of credit.

There is also a relatively new type of financing available in the unsecured financing market. Although it is not completely unsecured, it may provide the best of both worlds for both lenders and borrowers alike.

The alternative option available is a partially secured business loan . A growing number of lenders now offer partially-secured loans for business, and for many entrepreneurs and lenders, this really could be the most attractive option available.

This type of business loan provides borrowers with the ability to be approved for a business loan without having to put up too much collateral. This tends to make lenders a little more willing to lend because they are still somewhat protected by the collateral that is secured.

In addition, these loans are usually not forgiven by bankruptcy courts in their entirety, so lenders can feel more secure knowing that at least some, if not all of their money, is recoverable.

While an unsecured loan may not be right for every business, it may be a viable option for yours!

Frequently Asked Questions:

We can assess any business with an Australian ABN that has been trading for 6 months or more with monthly turnover of at least $10,000.
Once you sign the Business Loan Agreement, the funds are transferred that day and should be in your account the next morning. Usually the entire process takes only 24 hours.
The loan term for an Unsecured Business Loan is 3-24 months.
Our process is simple and can be completed online. We require a completed Application Form, Drivers license and 3-6 months of bank statements to process business loan applications under $150,000. For business loans of $150,000 or more, we require Drivers License, 12 months bank statements, Interim & audited company financials (Balance sheet, Profit & Loss), Accounts payable & receivables ledger.
The total payback amount of the loan is determined during the credit assessment after which you will be advised of how much you can borrow repayments, any fees and interest. The interest rate for an unsecured business loan depends on the strength of the business, the experience of the owner, and the business’s operating cash flow.
Our business loans are generally sized according to the business turnover and they range from $5,000 to $500,000.

Grow the business you want.

See if You Qualify

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