The easy way to get business, commercial and invoice finance
Growing a business is hard – but getting a loan can be even more challenging if you don’t know the ins and outs of the finance market.
So rather than go through the painstaking work of comparing lenders and preparing applications, let Naked Finance do it for you.
We can help you:
- Buy a commercial property
- Buy new vehicles and equipment
- Secure invoice financing
How to choose the right business loan
Whether you need a business loan to expand your operations, move premises or cover an unexpected bill, it’s important to find a great loan that suits your specific needs.
The first thing you’ll need to decide is whether to get a secured business loan, which requires you to use an asset as collateral, or an unsecured business loan, which does not.
If you do provide security, it would generally need to be a high-value item, such as property, vehicles, inventory or equipment.
What are the pros and cons of a secured business loan?
Secured loans come with a lower risk for lenders, because they can seize and sell the asset if you default on the loan. As a result, secured finance typically has lower interest rates than unsecured business finance. You may also be able to borrow more money and have a longer loan repayment term.
On the other hand, secured loans are riskier for the borrower, as you have to put your asset on the line. And secured finance often takes longer to organise, because there’s more documentation involved.
What are the pros and cons of an unsecured business loan?
An unsecured business loan lets you secure funds without needing to put up an asset as collateral. But because the lender is taking more of a risk, you probably won’t be able to borrow as much money as you would with a secured business loan. Also, you will have to pay a higher interest rate.
However, the application is usually faster, because there’s no need to have an asset valued. You may also have more flexibility on how to spend the borrowed funds.
Comparing commercial loans
If you want commercial finance to buy a commercial property, such as an office, warehouse or factory, you’ll have no choice but to provide the property as security.
There are lots of commercial finance lenders in Australia, all of which have different product options and credit rules, so it’s important to be very selective.
Your borrowing power can vary significantly from lender to lender – sometimes by hundreds of thousands of dollars. Interest rates, fees and maximum loan-to-value ratios can also vary.
What is invoice finance?
Invoice finance is a loan against the value of invoices that your business has sent out but not yet collected.
With invoice finance, your unpaid invoices become the security – these are provided as collateral in return for a loan.
Invoice finance can provide a quick boost to your cashflow, as you can generally access the funds within one business day.
How to search for the best business and commercial loans
A business loan can give your business a much-needed boost, provided you find a lender and product that’s suitable for your unique needs.
The best business loan for your specific situation won’t always be the one with the lowest interest rate; sometimes, a higher-rate business loan might be more suitable if, for example, it has a faster approval time or comes with more flexible borrowing terms.
The same goes for commercial property loans and invoice finance – interest rates are important, but they’re not the be all and end all.
Finding the right business loan, commercial loan and invoice finance can be hard to do in Australia’s crowded business finance market. And if you apply with the wrong lender or structure your application incorrectly, you might get rejected – potentially damaging your credit score.
So rather than going it alone, why not work with Naked Finance?
The process will not only be easier and faster than doing it yourself, it’s also likely to produce a better result. That’s because Naked Finance has relationships with many lenders, knows their products inside out and can package your loan application in a way that maximises your chances of approval.