The 5 Keys To Getting Your Business A Loan

Getting business finance in Australia is relatively easy. There is a glut of bank and non-bank lenders you want to offer you finance. Money lending is the second biggest growing industry in Australia behind construction. That said you still need to make a sound application to get credit otherwise you will be refused. If you follow the 5 keys listed below you can guarantee that your business can secure the loan it needs.

Have existing credit lines

If you have clean finance record that is a good start. In Australia you have to demonstrate previous credit history and preferably still be servicing one line of credit. If you already have one loan and have shown a clean record of payment you can almost guarantee further credit. Providing you are able to show you can service the loan in its entirety there should be no problem. The main way to demonstrate that is to show a strong level of assets.

Have more assets than liabilities

This sounds obvious but your asset strength will directly affect the amount of the loan you can demand. You will be to show your assets both privately and as well as your business. Do not forget your assets include property, furniture and fittings, vehicles, equipment, cash, investments and debt owed to you. When you carry out an audit of those items you will see that you actually have more assets than you had first thought. You will need every asset you can claim to be able to get the best value loan for you.

Have a strong income record

Cash flow is vitally important to securing a loan of any type. If you can demonstrate financials that indicate your natural cash flow will be able to service the business loan then you should have no problem getting approved for a loan.

Ideally finance companies will want to see financials for a year but if you are registered for GST as you should be then you are required to complete a quarterly business activity statement. If you have completed two or three BAS statements your ability to borrow for your business increases significantly. Being a home owner demonstrates to the finance companies that you are in possession of a large asset and also that you have a track record of servicing a large loan. This will open the door to practically any kind of finance.

Offer security

Applying for a secured loan as opposed to an unsecured loan means you have greater ability to borrow more money. Being a home owner fulfils this but if you have other tangible assets like investment property and vehicles you can leverage off those assets to borrow more money. The downside to this is that you have more to lose in the event of failure.