One of the biggest decisions a business owner makes is how to best manage cash flow. Business growth and expansion don’t tend to happen overnight – however, an online business loan can help you achieve business success.
So how do you know which online business loan to choose?
There are many online businessloans options available to Aussie business owners. There are several factors to consider before you get started, including how long you’ve been running your business, the size and the industry, your financial capacity, and more. With the right information available to you, you can help your business achieve lending success.
What is a business loan?
Simply put, online business loans are an amount of money loaned to your business from a financial lender. Essentially, a business loan can be issued to finance a range of business needs, including business expansion or launching a new product. There is a simple 3-step business loan application online which shows you just how easy it is to apply for a loan within minutes.
Let’s look at this example, David recently opened his very own eco-friendly cleaning company. However, he has experienced a stall in cash flow as sales have plateaued. David has decided to launch a new product to market to a wider audience. David has chosen to invest in marketing to help him reach his goal of a wider audience and increase cash flow – however, he does not have the funds to market his company and launch this new product.
David calculates an extra $30, 000 for product launch, marketing, and covering the cost of developing a new product before business cash flow picks up. Additionally, David has decided to hire an additional part-time employee to help with the product launch and getting the new product out to buyers. He considers applying for online business loans over a 12-month period and is offered a 9% rate of interest. He used the Lumi calculator to calculate his loan repayments which work out to be $628.85 weekly.
- Marketing costs: $500
- Part-time employee wage: $500
- Loan repayment amount: $628.85
- Total: $1628.85 weekly
By using the Lumicalculator David calculated his online business loan repayments. He is comfortable with the figures and is now set to launch and market his new product!
What are the options for different online business loans?
With so much information out there, it’s important to know what your business needs to successfully choose online business loans for you. This will come down to the needs of your business, terms of the loan, and loan length.
Let’s dive into the common business loans:
- Line of credit: If you’re looking to borrow a certain amount of capital annually, this could be the option for you. A business line of credit can be helpful in managing shortages in cash flow and is typically based on accounts receivable and current inventory. You have access to a sum of money that you can draw down, and you will only pay interest on the amount borrowed. When you repay the amount borrowed, you will cease paying the interest.
- Business overdraft: A business overdraft could allow your business to access more cash than you have available to increase your cash flow. This can offer your business an extra layer of protection.
- Secured vs unsecured business loan: One important aspect to know about a loan is whether the loan is secured or unsecured. A secured loan secures financing by a valuable asset you own as collateral (such as a home, equipment, or vehicle). On the other hand, an unsecured loan requires no asset to be provided as collateral. Knowing which one is right for your business depends on your business goals and individual situati.on
Why apply for an online business loan?
- It can be a very quick process with an application outcome within 2 hours of applying and funds hitting your bank account the same day
- Online business loans of up to $500,000 are available to small business owners. There is no requirement of collateral for loans up to $300, 000 and no hidden charges, fees, or early repayment fees.
- Lumi offers a payment pause, a 4-week interest-free period without repayments. This option is hassle-free and can be used at any time.
- The loan repayment periods for an unsecured loan tend to be 3 to 36 months. Lumi is a trusted online business loans lender and offers completely transparent lending to help get your business ahead!
To apply for flexible and fast funding, call one of the friendly Lumi team members on 1300 005 864 LUMI and start your application today.
Apply online in 5 minutes and get funds within 24 hours once approved.
You get the option to pause payments for up to 4-weeks interest free.
Unsecured business finance to solve your cash flow challenges.
Find out how much you can borrow with harming your credit score.
Easier and faster than traditional bank business loans.
Transparent business finance with no hidden fees or charges.
Get funds to grow your business – open a new location, purchase stock, hire staff, buy equipment