Stock your shelves, get the tinsel out, the festive season bells are ringing! The silly season is just around the corner and this year it’s looking to be a very busy one as families celebrate together.
Most businesses are gearing up to stock up on extra items to make sure they have enough to fulfill orders. Businesses might be hiring extra staff to ensure their service levels don’t drop. Busy small business owners may need to look at additional funding such as a small business loan that they can apply online for. Are your staff, shelves, and business ready for the Christmas rush?
One of the best ways to ensure you can manage the extra business over the festive season is to be financially prepared. You could use savings, or look at obtaining a business loan or apply online for a number of financial products that will enable extra needed cash flow.
Let’s explore what are the types of business loans that you can apply for online and how you can ensure your loan application success.
What are the different types of business loans?
There are multiple loan options for small business owners. Online lenders pride themselves on supporting small business owners with loan solutions that will help businesses thrive. With a quick application process and automated systems in place. Some of the loan options that you might have heard of are:
- Secured loans: A secured loan is a type of business loan that is guaranteed by collateral, you can apply online for this type of loan with an online lender. When you secure your loan you will use an asset such as property, vehicle, or piece of equipment. This asset acts as a security, so if you default your loan repayments, the lender uses the asset to repay the debt. The benefit is the interest rate tends to be lower with a secured loan. Lumi actually offers secured loans up to $500,000 that are easy to apply for and can be approved within hours.
- Unsecured loans: An unsecured loan is a loan that isn’t secured by any collateral. You can borrow up to $300,000 and choose a repayment period over 1- 3 years. This can be beneficial as you don’t risk losing your car, property, or equipment if you experience cash flow issues. An unsecured business loan with Lumi is incredibly easy to apply online for and you can receive the funds on the same day.
- Covid Kickstarter Recovery Loan: Due to COVID-19 restrictions affecting small business owners all over Australia, Lumi created a dedicated Kickstarter loan to help businesses get back on track. A Lumi Kickstarter Loan is a loan that a small business that has experienced a significant drop in revenue due to COVID restrictions can apply for. Lumi will assess the earnings before and after the lockdown period, essentially omitting the lockdown period. They even have flexibility on when the repayment period commences as well.
- Business Line Of Credit. This is an option that is similar to a personal credit card however it is for your business. It is also a type of business loan that you can apply online for. You can draw down on funds and you only make repayments and pay interest on what you borrow. The borrower may withdraw and repay money as they wish only accruing interest on the amount debited at the time.
Business Loans And How To Apply Online
Before you apply online for a business loan, there are some measures that are recommended for you to take prior. We know the silly season will be chaotic so we have created an action plan to help you be ahead and improve the success of your business loan application.
1. Have a money plan
Before you apply for a business loan it is necessary to determine the amount of money you need to borrow and the purpose that you are borrowing the money for. Clearly defining where the money is needed will ensure that you are not over committing or taking a bigger loan than you might actually need. Keeping on top of your cash flow and knowing what money you have coming in and going out is an integral part of operating a business. These include your current income, net income, expenses, and the stock requirements for the Christmas season.
2. Prepare your paperwork
Get all your documentation ready in advance. Below is a list of the documentation typically needed to apply for a business loan:
- ABN/ ACN
- Proof of identification
- Financial statements such as your bank transactional data
- A business plan
3. Calculate your business loan repayments
Using the Lumi online calculator you can work out your business loan details before you apply online. Knowing what your repayments will be, can help you feel confident as you know exactly where you stand as you apply online for a business loan. When you do this you can also calculate your repayments so that you can be certain you are able to repay them.
4. Get familiar with your credit score
You can find out what your credit score is online using a credit score finder. Online lenders and banks use your credit score when you apply for a loan. When you find out what your credit score is, if it isn’t great, don’t panic. Online lenders and banks can use additional criteria to help you with your application, simply reach out to their customer support team for more information.
You can improve your score by making regular bill repayments on time and by making regular repayments on your business loan. Knowledge is power and knowing what your score is means you can work on improving it.
Now that you have chosen your business loan type your next step is to apply online now with Lumi’s easy-to-use application process. Getting started now with any funding you might need will mean you can put more focus on helping your customers. Lumi can help enable your business to keep its festive cheer spreading, to find out more click here.