Business Cash Flow Loans | Moula
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Easy to apply.
Simple as 1, 2, 3.
Apply for a business loan online in just 7 minutes, by following these three easy steps:
Have questions? Our friendly team is available
on 1300 88 09 72 weekdays 9am - 5pm AEDT
What is a Business Loan?
A business loan is a financial tool designed to provide businesses with the necessary capital to fund various operations, from start-ups to expansions. Whether you’re a small business or a large corporation, business loans offer a range of financial solutions tailored to your specific needs. In Australia, there are many business loan options available, catering to businesses of all shapes and sizes.
Why Compare Business Loans?
Just as every business is unique, lenders offer a diverse range of loans, each with its distinct terms, repayment options, and costs. While some lenders might quote with a Simple Interest Rate, we present your offer using APR (Annual Percentage Rate). These two can paint very different pictures of the actual cost of the loan. Simple interest might show you the basic cost of borrowing, whereas APR gives a comprehensive view, factoring in fees and other charges.
Some lenders might hit you with early termination fees if you decide to pay off your loan ahead of schedule, adding an unexpected expense. Whether you’re considering secured or unsecured loans, it’s crucial to compare to ensure you’re getting a deal tailored to your financial situation. After all, understanding the nuances between different lenders and their offerings can empower you to make an informed decision.
| Business loan from Moula (APR) | Business loan from other lender (annual simple rate) | |
|---|---|---|
| Loan amount | $50,000 | $50,000 |
| Term | 2 years | 2 years |
| Quoted interest rate | 18.95% APR | 18.95% annual simple rate |
| Interest expressed as APR | 18.95% APR | 33.55% APR |
| Fortnightly repayment | $1,158 | $1,325 |
| Total cost of credit | $10,252 | $18,891 |
How do Business Loans Work?
Small business loans are pretty straightforward, but there are 6 important components that you need to be aware of:
Why Choose Moula for Your Small Business Loan?
Understanding Interest Rates: How Do They Affect Repayments?
| 12 months | 18 months | 24 months | |
|---|---|---|---|
| Repayment amount | $2,086 | $1,445 | $1,126 |
| Total amount repaid | $54,236 | $56,335 | $58,552 |
The interest rate on your business loan plays a crucial role in determining your monthly repayments. A higher interest rate means you’ll repay more over the loan term. It’s essential to understand whether you’re getting a fixed or variable interest rate, as this can impact your repayments and the total loan amount.
Also, check out our business loan calculator for an estimate of payments and total loan cost.
How to Apply for a Business Loan
Get started in just 7 minutes with our streamlined online application process for a business loan.
Ready to apply? Here’s what you’ll need for the application process.
| $5K - $150K | $150K - $250K | |
|---|---|---|
| 6 Months Bank Data | Yes | Yes |
| Accounting Data | Yes | Yes |
| ATO Portal | No | Yes |
| Property Security | No | No |
The Importance of Cash Flow in Loan Applications
Cash flow is a critical factor lenders consider when assessing your loan application. Because security isn’t taken, cash flow is the best way to determine business viability and ensure they are able to repay the loan. A healthy cash flow indicates your business’s ability to repay the loan. Ensure your financial statements reflect a strong cash flow to increase your chances of loan approval.
Types of Business Loans: Which One is Right for You?
There are various types of business loans available, from term loans to lines of credit. The right loan for your business depends on your needs, whether it’s for working capital, business expansion, or purchasing equipment. Research each loan type to determine which is best suited for your business goals.
Traditional bank term loan
This is what comes to mind when most people think of a business loan from a bank. With a bank term loan, you will need to complete a lot of paperwork. Besides the application, you will be required to provide financial statements and possibly a business plan. Being a secured loan (requiring collateral), the interest rate will be lower. As a term loan, you will have a regular monthly payment. The main drawback of a traditional bank loan is the time it takes to get approved, which can be up to two months. Another challenge is that banks in Australia reject 74% of small businesses that apply for these types of loans (DFA SME Report).
Business credit cards
Business credit cards are a popular form of small business finance in Australia. Although the interest rates can be high for business credit cards, most offer an interest-free period (usually 55 days) on charges. So if you pay off the amount within 55 days of the charge, you don’t pay any interest. When applying for a business credit card, the provider will want basic details such as income and length of time in business. They will also check your credit report and score to determine your creditworthiness. Sometimes, business owners use personal credit cards for business finances. This can be a simpler form of business finance if it’s not possible to get a business credit card. However, it’s a good idea to keep your business and personal finances separate, so this option can bring some challenges with it.
Business Overdraft
With a business overdraft, you are allowed to run a negative balance on your regular transaction account up to a predetermined amount. You pay interest on any funds that are overdrawn from your account. In addition to the interest on funds used, you will be charged fees. These include an establishment fee and a regular accounting fee. Business overdrafts are available in secured and unsecured forms, with different interest rates reflecting varying levels of risk to the lender.
Business line of credit
With a business line of credit, you get approved to borrow an agreed amount but only pay interest on what you use. For example, if your bank approves a line of credit for $100,000 and you only use $50,000, you will only pay interest on the $50,000 you are using. This gives you the flexibility to use the money only when you need it. You can also repay the loan at your own pace. Business lines of credit usually start at a $50,000 minimum, so if you are looking to borrow a lower amount, a business line of credit won’t be an option for you.
Business equity loan
A business equity loan can be in the form of a loan or line of credit which is secured against residential or commercial property. Several advantages of a business equity loan are that you can borrow up to 100% of the value of a residential property used as security for the loan and get a competitive interest rate. The biggest shortcoming of this type of loan is that your property is at risk if you get into financial difficulties and cannot make the payments.
Low-doc or no-doc business loan
If you don’t have financial statements and proof of income for the previous two years, a low-doc loan could be the solution. If you can’t provide proof of income, a no-doc loan might be suitable for meeting your business finance needs. Low-doc and no-doc loans are backed by residential property. The main drawback of these loans is higher interest rates due to the increased risk to the lender. Low-doc and no-doc business loans are usually provided by specialist non-bank lenders such as Liberty. Approval times for these types of loans can vary from a few days to weeks.
Unsecured business loan
These types of business loans are growing in popularity in Australia due to the ease and speed of getting them. Some fintech lenders specialise in helping small-to-medium businesses get the finance they need without having to go through a complicated lending process. When applying for an unsecured online business loan in Australia, the lender safely and securely analyses your finances, including banking transactions, along with other information to determine how much you can borrow. Compared to many other business loans in Australia, the process is quick and straightforward. Learn more about online business loans from Moula.
Invoice financing
If you don’t want to wait to receive money from your customer invoices, you can work with an invoice finance company to receive the funds sooner. When you create an invoice, you ‘sell’ it to an invoice finance company. They pay you a percentage of the total invoice value (80% to 95%) immediately and charge an advance fee (usually between 2% and 5%) of the invoice amount. When the customer pays the invoice, you get the remaining funds, minus any fees and charges.
Secured vs. unsecured Business Loans: What's the Difference?
An unsecured business loan doesn’t require collateral, while a secured business loan requires you to offer an asset as security. Unsecured loans might have higher interest rates due to the increased risk for lenders. Secured loans are backed by collateral that has been pledged by the borrower. Depending on the type of the loan, collateral for a secured loan can include residential, rural or commercial property, machinery, equipment and vehicles. It’s essential to understand the differences and decide which option is best for your business.
Navigating Business Loans Across Australia
Business loans in Australia cater to a diverse range of businesses. Whether you’re in Sydney, Melbourne, Brisbane or a rural area, there’s a loan product tailored to your needs. Research and compare lenders to find the best fit for your business.
Traditional bank loans vs. online business loans
Getting a business loan can be a long and complex process. With a bank loan, for example, you will have to complete a large amount of paperwork and might need to provide complex documents, such as a business plan. In addition, research has uncovered that banks reject 74% of small business loans applications.
Fortunately, there are more suitable finance options available if you have an existing business that’s been operating for at least six months. At Moula, our application process is paperless and it won’t take weeks to process. You can apply online in minutes and we can have an answer for you within 24 hours. Plus, we specialise in unsecured loans, which means no collateral is required.
Learn more about online unsecured loans vs traditional bank loans
Business Loan Basics
There are many uses for a business loan. You may want to grow your business, improve your cash flow, or purchase inventory.
When looking for business finance, many credit products are available, including term loans, business overdrafts, a line of credit, business credit cards or equipment finance. Some of the key questions to ask include:
- What is the interest rate? Is it a fixed rate or variable rate?
- What are the loan terms?
- What are the repayments like, and will I be able to repay the loan?
- What are the terms and conditions?
- Are there any hidden fees, including early repayment fees?
If you’re a business owner, you probably don’t have time to complete large amounts of paperwork and then wait weeks for a response. That’s why we make it easy to apply for a business loan. Instead of requiring you to complete loads of paperwork and supply a business plan, you can complete a business loan application online in under 7 minutes. Once you link your business data, we can assess your application in real-time and can provide an answer within 24 hours.
It can take 6 to 8 weeks to get an answer when applying for a traditional bank business loan. But in a fast-moving business environment, sometimes you need business funding fast. This could be to buy discounted stock, cover a short-term cash flow shortage, or purchase equipment. We’ll help you get quick access to business finance when you need it, without the long wait. Once approved, funds are transferred to your account by the next business day, letting you get on with growing your business.
Some business lenders will charge fees, such as administration fees, direct debit fees, and early repayment fees. These fees can add up significantly, and if you weren’t aware of them when you applied, can really inflate the cost of your business loan. When considering the cost of finance for your business purposes, be sure to read the fine print to understand what fees you are being charged.
With Moula, there are no hidden fees and no hassle. You can crunch our numbers with our loan calculator and see exactly what your repayments will be.
