There are more people opening businesses than ever before but the economic climate in recent years has made it tough to secure any financing to grow a business. If you run a business, at some point you might need to take out a loan to hire more staff, do more product research, buy more tools and equipment, and do more marketing. But getting that loan now from the big banks is fraught with problems.
Why Are Banks the Problem?
When a bank considers a loan application, they are assessing their exposure to risk. If they believe that the individual asking for the loan cannot meet his or her commitments to repayments, they are likely to say “no” to the loan.
The problem is that the criteria for personal loans is quite tough. A recent banking Royal Commission into bank behaviour and the global financial crisis of some years ago has generated an unfavourable lending environment for banks. This means that they are risk-averse and apply much tougher criteria when assessing an applicant.
For many people, this is bad news if they have a poor credit history or don’t meet the bank’s strict criteria. In these cases, a bank may ask for collateral as security against the loan, such as a home or other large asset. But what happens if you simply don’t have enough collateral? How can you get a loan?
The Beauty of an Unsecured Loan
If you don’t have enough traditional collateral for the big banks, you’ll need to get an unsecured loan. This loan is assessed only on the creditworthiness of the individual who is applying for the loan and not on how much collateral he or she has.
If you’re looking for unsecured business loans in Australia, the good news is that there are some companies who have stepped up to fill the significant gaps left by the big banks and other major lending institutions. Many such companies offer the following kinds of terms:
- A much lower monthly interest rate than big banks, even under one percent
- Fast turnaround of financial assessments for unsecured loans
- An acceptance of people who might have bad credit ratings or poor credit histories
- Acceptance of those with low-doc or no-doc loan requirements
In general, these kinds of loans are ideal for small business people who need some quick cash to grow their business concerns.
If you run a small business and you need a quick loan but cannot meet the strict criteria of the big banks, all is not lost. An unsecured loan can help you get your business up and running in no time.