Are You Thinking About Taking Out A Business Loan?

By Author: Callum Bini
Total Articles: 61
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You are not alone. In fact, according to the Small Business Administration, around half of all businesses in the Australia took out some form of loan in 2017.
 
But before you get the ball rolling on your application, you should ask yourself: do I know what I'm doing?
 
In this post, we'll go over everything you need to know about business loans so that you can make the best decision possible when it comes to taking one out.
 
What is a Business Loan?
A business loan is a type of financing that companies can use for their operations. Business loans in Sydney are typically used for things like starting a new company or expanding an existing one, rather than working capital or day-to-day expenses. Traditional banks offer business loans with interest rates ranging from 4% - 12%, depending on your credit score and other factors such as collateral (assets used as security when borrowing money). The average repayment term for these types of loans is usually between three ...
... months and ten years long, but they can be extended up to 30 years if needed.
 
The process of taking a business loan is pretty straightforward and painless,
 
But there are some key things you should know before you apply. Here's what to expect:
 
1. Your credit history will be checked.
This is a good thing-the better your credit history, the lower interest rate you'll get, and the more likely you are to be approved at all. You'll want to ensure that your credit score is as high as it can possibly be before applying, so take care to avoid any late payments or derogatory credit activity.
 
2. You'll need a business plan.
You'll also need to have been in business for at least one year, but this applies if you're applying for a startup loan as well as more traditional business loans like term loans or lines of credit. If you're applying for an SBA loan, you'll need to have been in operation for at least two years.
 
3. You'll need collateral.
If your business is at the stage where it can't qualify for unsecured debt, you may still qualify for business loan in Sydney if you can put up collateral (i.e., something valuable that can serve as a guarantee to repay the loan). This might be real estate or equipment-something that will give a security to the lending company. You will give the loan pretty easily!



About the Author: This contribution has been made by Callum Bini who has written a number of articles on Business Loan Sydney and provides fruitful information.