what are the options for small business loans?

The majority of small businesses will experience cashflow problems. Learn more about small business loans to help you grow your business.

  • October 5, 2021
  • 4 min read
  • Thornmoney
  • October 5, 2021
  • 4 min read
  • Thornmoney

Securing capital to start a business or to maintain a positive cashflow for the expansion and survival of an existing business is a stressful and challenging process. Furthermore, if you are a woman (as archaic as it sounds, women and minority business owners around the world have historically encountered gender bias when trying to raise capital according to research conducted by HSBC Private Banking).

two-step method

With the above mentioned in mind, if you’re a budding business owner, how would you rise above and acquire a healthy source of capital? All it takes is two things. Firstly, start by asking yourself these three questions before exploring funding options – ‘How much finance do you think you need’, ‘What is the nature of your business’, and ‘What is the stage of your business development (start-up or established)’. Secondly but most importantly, narrow down the best business finance options to meet your needs.

choosing a suitable loan option can flourish your business

options for small business loans

Let’s explore the different ways you can finance your business:

Bank Products

Speak to your bank and ask them to share their finance options. They will be able to offer you the most well-known forms of starting capital and growth finance namely bank loans, overdrafts, and business credit cards. The latter is best for short-term funding to assist with covering costs during an emergency. Do pick a bank that is familiar with you or your industry as they’ll likely prioritise your cashflow projections. Moreover, they understand the capital requirements needed to support growth.

Government Grants

Though the application process can be lengthy, complicated, and restrictive, grants are available on business.gov.au for a wide selection of industries. Generally, they are low-risk options which means you might not have to pay any of the money back, making this a great choice for start-ups.

Invoice Finance

Best for growing businesses, this is a type of cash flow financing which allows you to use outstanding invoices as collateral. With invoice finance, up to 90% of the invoice amount can be accessed as ‘cash advance’. This is great especially since it can take 90 days to receive payment (based on your business’ net payment terms). To get more details about this funding option, read What is invoice finance?

Asset Finance

Ideal when you need to rent or buy new or used business equipment and vehicles. This type of funding enables you to spread the cost of an asset over its lifespan, keeping cash available to run your business. Depending on the type of equipment, you can get funded up to 100% of the asset’s value.
The asset will be the security for the loan, however, sometimes, lenders might require additional secured guarantees. Read what is asset finance?

Small Business Loans for women entrepreneurs

As archaic as it sounds, women (and minority) business owners around the world have historically encountered gender bias when trying to raise capital. Thankfully avenues such as the ones provided by the Office for Women are available to counter this. There are two grant funding streams under the Women’s Leadership and Development Program namely The WLDP Project Grants stream and National Women’s Alliances stream. Most recently, the Office of Women is inviting applications for the Lead and Succeed grant which aims to increase gender equality, extend leadership and economic participation opportunities, and build a safer more respectful workplace culture.

thornmoney’s small business loan options

Thornmoney offers invoice finance solutions that allows you to turn unpaid invoices into fast funds within 24 hours since approval. With no lock-in contract, it is as simple as connecting your accounting software with our platform.

If you’re upgrading your fleet or business equipment, our asset finance products might be your answer. We offer funds for newer businesses as long as one of the directors has at least 2 years experience in the related industry. Besides, our loans are available with tailored rates for your business and various payment terms up to 5 years. The options include chattel mortgages and rental agreements.

Contact us today to figure out the best funding solution for your company.

Disclaimer: This information is for general information purposes only. Therefore, the information contained herein does not constitute financial or professional advice or a recommendation. Ultimately, it has not been prepared with reference to your financial circumstances or business and should not be relied on as such. You should seek your own independent financial, legal and taxation advice as to whether or not this information is appropriate for you.

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