How to choose the right business loan at the right time

Every business requires funding at some point. For a major purchase, ordering extra stock, recruiting new staff, consolidating debts or perhaps to cover loss of income. As businesses have many more choices than individuals when it comes to borrowing, and with the number of small business funding options growing, it is often confusing for a business owner to try and choose the right finance solution to match their individual needs. Advisory accounting together with the services of a knowledgeable finance broker is often the winning combination when navigating this complex environment.

What is happening in the business?

The starting point to the problem-solving process is, of course, to determine what is happening in the business right now. Is there a growth opportunity of a lifetime in sight? Or are we perhaps looking at a larger one-off expense, such as renovations or an equipment purchase? In these scenarios, a small business loan may be the right option to consider. 

A small business loan provides a lump sum of up to $300K to invest in growth opportunities or one-off expenses and the client will be pleased to hear that funding will be possible in as quickly as in 24 short hours. Both repayments (either weekly or daily) and the term (anywhere between 3 and 24 months) will be fixed with repayment down to $0 at the end of the term.

In another usual scenario, the company will be looking for a tool to manage cash flow fluctuations. This might be calling for a line of credit as it provides handy ongoing access to working capital up to $100K. It can be useful for covering unpaid invoices, purchasing urgent stock or paying suppliers. It offers the business a flexible opportunity to dip in and repay as often as needed. Interest will only be paid on what is used when it’s used with a 12-month renewable term.

On some occasions, there will be a bit of both going on simultaneously: a large one-off investment opportunity just waiting to be seized while the cash flow may be doing its own seesaw. In a case like this, a combination of a small business loan and line of credit may turn out to be the most useful route to follow.

Effortless liquidity

Regardless of the financing option they choose, any business owner will most likely be expecting an effortless application process and fast access to the cash when they need it. 

With the cash flow-based lending options the financing can typically be obtained extremely fast as the loan will be underwritten using only basic information, bank statements and ATO portal only and no financial will be needed. 

Interested in exploring the different funding options?

Whether facing an unexpected challenge or the growth opportunity of a lifetime, the right business loan at the right time can be a critical success factor. The way commercial finance is structured may have a massive impact on the overall costs and potential tax savings. 

Our friendly team at Prosper Finance will be able to offer knowledgeable specialist advice with a wide variety of business financing including secured and unsecured loans, tailored asset finance and leasing options, renewable loans and more. 

Get in touch with a Prosper Finance business finance specialist:tel. (02) 8971 4756 or info@prosperfinance.com.au.