Short Term Business Loans
Secure a short-term business loan quickly at easy terms in Australia. Getting a business loan for a small or medium-sized enterprise is not complex. We will help you choose the type of loan that best fits your business needs.
Short-Term Business Finance
Up to $1,000,000.
No Doc and No Credit Checks
Same Day Approvals
No Hidden Fees
Short Term Startup Business Finance
Serving Since 2001
Lending All Across Australia
Short-term loans are typically paid back within a short time period (6-12 months). These loans have higher interest rates compared to longer-term loans.
Table of Contents
- What is a Short term Business Loan?
- How do short term loans work in Australia?
- Types of Short-term business Loans
- Short-term business Funding Pre and Post Covid Pandemic
- What to consider before Applying?
- The Choice between Banks and Private Lenders
- Advantages of Short-Term Finance
- Case Study: Quick Short-Term Business Loan in Melbourne
- Frequently Asked Questions (FAQs)
Short term business loans mostly cover temporary or immediate financial needs, such as cash flow gaps or inventory purchases. Short term business loans can be unsecured or secured. Unsecured short-term loans do not require any collateral, which means they carry a higher risk for the lender and, therefore higher interest rates. Secured short-term loans require some form of collateral, such as property, which can reduce the risk for the lender and, therefore lower interest rates.
What is a Short term Business Loans?
The “short-term” makes it clear that it is a loan repaid in a short period, typically 12 months or less. This can be a great option for businesses to cover cash flow gaps, cover expenses, and purchase inventory or equipment. It’s also an option for those who don’t have enough capital to start their business but want to take advantage of some financing options before they dive into debt.
The main advantage of taking out short term business loans is that it allows you to make purchases that would otherwise be impossible with only cash. For example, if you own a construction company and one of your new projects needs inventory, Short term business loans will allow you to do so immediately. You can purchase the inventory, focus on the project, and repay the loan when you get the payment.
How do short term business loans work in Australia?
If you need fast cash, a business loan is the perfect solution. You can get short term business loans for up to 6 months, which means you can get the money you need now and start using it immediately.
There are many reasons why someone would want to apply for a short-term business loan in Australia but one of the main reasons is that it allows you to take advantage of those times when you need to replenish your business balance sheet with quick cash.
It’s important to note that if you have a poor credit history, it will be harder for you to secure a loan from traditional lenders like banks and building societies. However, there are still options available for people who have a bad credit history or no credit history at all. For example, some companies offer unsecured loans through their credit facilities as well as secured loans through their collateral (such as assets).
Another way that unsecured lenders like Payday Loans allow borrowers with bad credit histories access to funds is by offering them short-term loans with no collateral required – just their good faith and trust.
Types of Short-term business Loans
Suppose you’ve decided you’re in the right place to get a business loan for business expansion. In that case, you are required to select from various business loan options for small companies in Australia. However, a few loan (and the most common) options available in Australia are as follows.
- Term loans from banks and private lenders
- Short-term business loan
- Secured Business loan
- Unsecured business loans
- The line of credit for business
- Business equity loan
- No-doc business loans ( No-doc low doc business loan)
- Low-doc business loans ( No-doc low-doc business loan)
- Caveat loan
- Construction Finance
- First Mortgage
- Second mortgage
- Bridging Finance
- Unlike banks, private lenders will require from you a few documents for short-term business loans. The eligibility criteria for short-term business loans are
- Identification Documentation – ID – driver’s permit or passport or both.
- Business statements – Six months.
- Business Plan ( If required, considering the scenario).
- A few pertinent documents provide proof of income source for the individual doing business.
Bank statements: The company should be at least six (6) months old. A business plan to support your fund’s utilisation will be essential for new and start-up companies. The last six months’ bank statements of the business are also required.
Short-term business Funding Pre and Post Covid Pandemic
The government’s SME Recovery Loan Scheme aids in economic recovery. It offers continuous support to SMEs dealing with the economic effects on businesses affected by the covid.
The SME Loan Guarantee Scheme is a government program for loan-backed businesses to improve their financial situation. This scheme best suits a small portion of Australia’s small and medium-sized businesses. This occurred in 2004 when the previous one was replaced with the SME Recovery Loan Scheme. The new scheme offered a considerable part of the same program but allowed SMEs to use a broader range of loans, providing longer repayment terms. Besides, the borrowing company can utilize the acquired loan to serve several business purposes.
Of its flexibility and user-friendly terms, many companies became eligible for this loan scheme. At the same time, many SMEs could not obtain the required financing. The good news is that as of 2022, most of the unsecured business loan lenders in Australia have improved their loan approval scores for unsecured loans. This is done to cover those aspects that the Government scheme could not cover. Thus, providing cash flow to more SMEs for business needs.
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What to consider before Applying?
A few important rules to keep in mind:
- Don’t apply if you’re not confident or uncertain about repayment. It could be a significant burden on personal and professional life.
- Don’t unnecessarily apply for a loan; apply if you require it for the right reasons. However, think twice before applying for short term business loans.
- Do thorough research to know the best, suitable loan types.
- Short term Business loans are based on the financial system. The sooner you require the funds, the dire the situation gets (i.e. bad credit), and the interest rate will be high.
The commercial lending sector does not pursue the same way as personal loans. However, the regulatory authorities believe the borrowers are in a more secure position compared to an individual who ought to be informed on such issues. To ease things up, first. make a rational decision on whether you should use banks or private lenders to finance the business. This will direct you in the right direction. Securing prior essential knowledge serves as a guideline for those new to business loans.
The Choice between Banks and Private Lenders
Suppose you choose to use an alternative business lender, and the final decision on the loan discretion is made within 24 hours after applying. A big portion of the processing is completed online using an advanced algorithm.
When it comes to small-business financing, The decision to approve the loan with primary conditions will be based on their assessment. However, in the same context, a credit score is also vital. It is not only an important aspect, but you’ll receive the loan fast – sometimes the same day after completing the mandatory steps of the routine procedure.
Whenever you proceed with a private lending company, they ensure to send an exact repayment plan to the borrower. They also ensure that there are no hidden or additional charges. This makes the loan a flexible and efficient choice for the borrower. The private lenders also don’t impose any penalty for early repayment fees unless there is an exceptional case.
‘Reach out to the appropriate lender offering a similar business loan. Avoid banks if you don’t want to get into any financial jargon and want a loan quickly. Additionally, with the support of private lenders in Australia, you can get an unsecured short-term business loan if you need one.
Whereas, through private lending companies, you’ll pay, in general, more interest rates than banks by providing fewer documents.
The banks normally take several weeks and even months to approve short-term business loans. The procedure takes so much time that the loan is disbursed at a time when you no longer need it. This is why Australians approach private lending companies for loans.
With various banks providing SME loans, loan applications are turned down if you have a poor credit score. According to studies, 65 per cent of loan applications get refused due to the inability to meet the bank’s risk profile requirement and misrepresentation of business in the application.
On average, if you apply through banks, you are guaranteed to get better interest rates compared to private lenders. However, the payment schedule for banks can be unclear, and you could face early payments. However, the bank’s strict requirements and thorough documentation is the primary obstacle.
Banks prefer longer-term loans over short-term loans, but they can provide both. In comparison, private lenders prefer shorter terms with flexible conditions but with high interest rates.
Most SMEs in Australia approach private lenders rather than banks to acquire shortterm business loans. If you require the loan immediately, a private lender is the best and quick option to provide a short-term business loan. However, private lenders offer working capital financing, usually considered an urgent need, but construction loans are more durable.
The bank will drain your time into verification and requirements, eventually prolonging the loan process. To save from this hassle, business people and companies approach private lenders and get loan approval within one (1) business day.
With private lenders, low-doc business loans and unsecured loans are available to meet the cash flow you need for your business expansion. However, you can opt for a small-business loan if you are a prestigious business owner or not eligible with the bank. A private lender can walk you through the completion of all the required documents after the online submission of the application. Whereas, with banks, you will have to wait for several weeks and months to get loan approval.
Advantages of Short-Term Finance
Short term business loans offer a number of advantages for businesses, including:
- Faster access to capital: Short term business loans can provide businesses with the capital they need quickly, often within a few days.
- These loans are easier to obtain than traditional loans
- They can be secured and unsecured
Case Study: Quick Short-Term Business Loan in Melbourne
A business owner in Australia, who was looking for a short-term loan to run his business, applied on our website. He explained the purpose of the loan and how much he needed to start his business. The same day, he received an email from a Basic Finance representative who asked him to come to our office for further discussions about his application.
When he arrived at the office, he got another email detailing how much money he could get from the loan and what conditions applied. The representative explained that to receive this money and start his business; he would have to pay back this amount plus an additional monthly fee until all debts were cleared.
The businessman agreed and signed all necessary documents before leaving our office with a cashier’s check equivalent to half of what he needed for his new project.
Frequently Asked Questions (FAQs)
Does pre-approval affect my credit history?
Not at all. Your credit history will not have an impact while submitting an application form for pre-approval.
Can I obtain a short-term business loan if I have poor credit?
Do personal credit problems impact my business credit?
How do I fix my business credit score?
It’s NO big deal. You can fix your business credit score in various ways. A company can achieve a required score by improving capital and utilising credit amounts, such as paying your bills on time and maintaining your credit reports.
How long will it take to be accepted?
Do I qualify to get a business loan?
What documentation do I need?
Is it challenging to obtain the business loans you need?
Are two people able to get an unsecured loan?
What are your rates of interest?
Do I have the liberty of paying the loan early with a short-term business loan?
Is the interest you pay on a business loan deductible?
Where can I get a short-term business loan?
Do I qualify for commercial credit as a self-employed person?
Do I qualify for an investment loan from a sole trader?
What if I don't own an existing business?
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