Approval
Understanding your chances of getting a loan approved can you save you a lot of time.
Here we’ll go over the four core business requirements to qualify for a short-term, unsecured business loan.
History/Age of Business: 6 months minimum
The longer you have been in business, the lower the risk attributed to your business will generally be. Over time you’ll demonstrate your capability of being a successful business owner. As a rule, businesses that have been around for more than 2 years will receive more favourable terms, but 6 months is the absolute minimum.
Turnover: 60-100% of monthly turnover
Unsecured business loans are all based on your future cashflow, so a key contributor to how much you can borrow is your average monthly turnover. Most financiers will look at 60-100% of an average month’s turnover. For example, if you turnover $50,000 per month on average, you are looking at a $30-$50k loan being available.
Credit Rating: the cleaner the better
As with all finance, your credit rating is important. Whilst you can have some blemishes on your record, you’ll get better terms when you have a clear credit history and no ATO debt.
Industry: no high risk
Those that operate in a high risk industry are going to struggle to get an unsecured loan approved due to the chances of default being too high. We’d recommend exploring other avenues such as using property as security for a loan.