When it comes to small business loan, there is not much available with the business owner to offer as collateral as the fact says that there is 50% of the probability that the small business is still at the stage of surviving. In such situations, small business Loan in Australia available to apply for without collateral is a big-time growth opportunity to the small businesses. In this juncture, five types of small business loans are introduced among with no collateral are asked for! Take a glimpse—
In an unsecured business loan, the financial condition of the business is that matters. Alongside, the ability of the borrower to pay back the loan as per the terms & conditions also comes into counting. In noteworthy of mentioning, in an unsecured business loan, since, the maximum risk lies on the side of the lender, the terms & conditions of the loan may vary from the lender’s side of the tunnel as his satisfaction is the aspect of the final decision in the context of loan approval.
Purchase Order financing is a kind of small business loan where the loan money is transferred to the suppliers of business in exchange of resources and when the order finally gets delivered to the customer, the payment is made to the Lender instead. On the contrary, any transaction benefit is announced as the right of the business owner and thus, it lies into the accounts of the business.
Invoice financing is a kind of small business loan in which the lender lends money against the outstanding receivables of business (invoices). The repayment of the loan in case of Invoice financing is processing when the third parties (upon whose name the invoices are made) make the payments. This method is recommendable in case of urgency as it is a one day process only.
Equipment financing, rather than demanding loan money the business directly demands the financing of Types of equipment or loan for making an equipment purchase. Cash flow statement of the respective small business plays a significant role for the lender to make an approval decision.
Trade Financing is quite similar to the Purchase Order Financing; however, in trade financing the agreement based on the deadline to make the repayment of loan money exists. In this case, the Lender is the third-party and plays no role in grasping the payment made by the customer.
“Get Loan Ready not collateral ready!”