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How Can Your Clients Benefit from Unsecured Business Lending?

More small business owners are seeking unsecured business lending for many good reasons. They might have been knocked back by their bank or don’t want to use their residential property as collateral. Let’s look at some of the ways that businesses are using unsecured business lending.

Managing cash flow

This is one of the most common reasons for getting unsecured business finance. Some businesses have seasonal ups and downs that cause cash flow shortages. Research conducted by Wakefield Research and Intuit Australia has revealed that over 60 per cent of Australian small businesses have experienced cash flow issues in the past 12 months. In addition, the lack of cash flow has meant that Australian small businesses have lost opportunities worth an estimated $5.8 billion. Another factor is slow payments from customers. The survey revealed that 31% of SMEs estimate that they have more than $20,000 on average owed to them. 

Unsecured business loans can be a quick solution to help businesses keep up when there’s not enough working capital to cover expenses. Secured loans usually take longer to get approved, so won’t help when cash requirements are urgent.

Purchasing inventory

Businesses that need to gear up for busy times of the year often seek unsecured inventory finance. Unsecured loans are available for shorter loan terms and lower loan amounts, so they fit the bill when a small business needs access to funding to purchase inventory.

Buying machinery and equipment

Businesses that create products or deliver services need access to finance to purchase machinery and equipment. When surveyed, 46 per cent of SMEs said they would purchase machinery or equipment if they had the funding. While secured lending for equipment and machinery is available, it’s not always the best option. For example, many secured equipment loans can only be used for new equipment. For a small business that wants to purchase suitable used equipment, unsecured equipment finance can make it happen.


Effective marketing is essential for growing a business. When asked what they would do if they received business funding, 61 per cent of business owners said they would use it for marketing. While effective marketing will bring in more customers, there’s always a lag between spending money on marketing and seeing the results. Unsecured business lending makes it possible to implement marketing campaigns for business growth.  

Hiring more staff

Many growing businesses need to increase staff but don’t have the working capital to make it happen. While additional staff can help increase revenue and boost the bottom line, it can take time to see results. When surveyed, around one-third of SMEs said they would hire more staff if they were able to get the funding needed.

Consolidating debt

Having debt from various sources can be time-consuming and costly. For example, a business with outstanding credit card debt will usually have to pay fees as well as interest. Consolidating debt can help business owners save time and money. Applying for an unsecured business loan, such as Moula, is quick and easy. Business debt consolidation with an unsecured business loan will enable business owners to take control of their debt.

Paying off ATO debt

Many businesses will have difficulties meeting their obligations to the ATO. In fact, as of 2019, this amount was around $15 billion. Although the ATO can offer payment plans, it can hinder a business in other ways. Many traditional lenders won’t lend to a business or person with outstanding tax debt. In addition, ATO payment plans are automatically cancelled if the business misses one payment or a future obligation (such as the next BAS payment). Outstanding tax debt can affect the credit history of a business. As of 2018, the ATO has been able to report this debt to credit reporting agencies. 

Implementing new systems and processes

Many businesses know the importance of having the right systems and processes in place to maximise productivity. Xero’s State of Lending Report notes that 30% of businesses would improve systems and processes if they had the funds to do it. For example, manufacturing companies can benefit from having production management systems in place. The expense involved means that companies delay implementation or don’t proceed because they lack the necessary finance.

Be a solution provider for your clients

Business owners seeking small business loans from traditional lenders are frustrated by the complicated process and the rejection they experience. In fact, 40 per cent of SMEs reported they found it difficult to get business finance in 2019. Eighty per cent of business owners think that the documentation and other application requirements make it challenging to get a business loan. Of the business owners how had obtained business finance, 42 per cent said the most difficult part of the process was providing financial documents to lenders. 

Fortunately, Moula has streamlined the business lending process that makes it as simple as possible to apply for a business loan.


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