If you’re thinking about Growth, Safety, Efficiency and Certainty, and you know which areas are most important for your small business, it’ll be much easier to work out which features are fundamental and which ones you can afford to pass up.
Growth
If you need funds for expansion, renovations or to buy inventory and equipment, you may want to look at two types of loans that are geared towards growth: secured and unsecured loans. Secured business loans require that you own some sort of asset that you can offer to the lender as 'collateral,' whereas an unsecured loan does not require any asset. Secured loans have better interest rates, while unsecured loans are best for fast approval with no security.
Safety
Some business loans are geared towards giving you peace of mind, knowing that you have easy access to funds for day-to-day, and unexpected, expenses. There are two main types of safety loan: overdraft and line of credit. An overdraft is a feature that can be added to your business banking account, allowing you to 'overdraw' your account, even when your balance is zero. A line of credit is a standalone facility that can be drawn from as needed. Both options have similar interest rates and repayments are made only when you draw funds.
Efficiency
You may be looking at taking out a business loan to purchase new equipment or vehicles so that you can serve more customers. For example, a cafe owner may want to upgrade their espresso machine to reduce wait times during the early morning rush. The greatest advantage of an efficiency loan is that the item you purchase becomes the security for the loan, which means that you do not have to offer any further collateral.
Certainty
There will be times when you need to access cash ahead of time. There are two types of certainty loan: debtor finance and cash advance. Both options allow you to receive upfront cash. Debtor finance lets you access cash from your accounts receivable or invoice ledger, whereas a cash advance provides you with funds based on your monthly sales.
What’s the takeaway?
Think about the purpose of your business loan. Do you have an idea of how much you’ll need and for long? You can research your business loan options using a service like Valiant’s business loans marketplace, or have a chat to our team of credit specialists. You may also want to consult your accountant, lawyer or trusted business advisor.
Nat is the Communications Manager at Valiant Finance. She has a double degree in Journalism and Law, and a background in the fintech space, hailing from Asia's largest fintech hub, Stone & Chalk.
Related Posts
A minor setback can be challenging, but there's no reason to let it derail your business goals. Here are a couple of coping strategies to keep you moving.
Put your best foot forward by preparing strong answers to these 4 questions.
A little preparation goes a long way. Get ahead on the finance front with our quick tips to help you with the 3 key areas of your loan application.
Cut through the confusion. There's so much talk around credit scores and what they mean; it can be hard to seperate fact from fiction.
The time arrives in most small businesses when you’re required to borrow money. So, how do you get 'business finance ready'?
We sat down with Neil Slonim, The Bank Doctor, to find out what he thinks about Australia's fast-growing online SME lending market.
Finding the right business loan doesn’t have to be difficult. See how we helped Mark’s Wholesale Steel Business find the right business loan for them.
How do you attract new customers to your business? Where do loyal customers come from? It all starts with your SMB online strategy.
The path from personal trainer to business owner can be both challenging and rewarding. Check out our top tips for making the transition.
Want to reach your customers online? Are you ready to digitise your small business? First up: get smart about social.
Don't let angry customers stay angry. Protect your business' reputation with these simple tips and tricks for delivering exemplary customer service.
Every business is unique. Every business loan is different. What features are most important to you? Consider these 4 things before applying for finance.
Have you explored your trade finance options? Premiering your business on the world stage may be within reach.
Your guide to smart inventory management for every season.
Get more customers and keep them. Here's the low-down on setting up your very own customer loyalty program.
You've explored your business finance options. What do you do next? How can you be sure you're comparing loans effectively and getting the best deal?
Want to expand your team but don't know where to start? Here's our guide to hiring great employees, featuring tips from industry leaders.
A Unique Selling Proposition (USP) is fundamental for any business looking to grow. Learn how to develop your USP and stand out from the crowd.
Are you invoicing your B2B customers with longer payment terms? Is it hurting your cash flow? Debtor finance could be a lifesaver between payments.
With so many business finance options to choose from, how do you know whether working capital is right for your business? Start by reading this.
2018 is your year. Here are 7 quick tips and tricks to get back in the driver's seat when it comes to battling business debt.
Are you ready to refinance? Reviewing your business loan every 2 - 3 years can save your SME a lot of money. Here's what you need to know.
Improve your chances of locking down the perfect business loan. Here are 19 business funding mistakes to avoid when you're applying for commercial finance.
Setting up a business is hard enough, without getting stung with unexpected costs. Here are the things you should be thinking about before you dive in.
Getting the best rate is all about asking the right questions. Have you done your research? Here's where to start and why.
"Ok, I'm eligible for the R&D tax incentive. But how do I actually claim it?" Here's what you need to know.
You could be missing out on a tax offset of 45 cents in every dollar. Check your eligibility for the R&D tax incentive today.
Need to raise cash for your business? We explore the use of debt versus equity, and how to decide which one is best for your business.
Reward points can add value to your business, but it's not one-size-fits all. Here's what you need to know.
Here's the million dollar question: will you start up a company or will you establish yourself as a sole trader? Get the full story.
Valiant Finance is a small business dedicated to supercharging the growth of other small businesses through access to funding. Here's what we've learned.
