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What Is Unsecured Business Finance?

Check out the presentation titled: What Is Unsecured Business Finance? Brought to you by Moula - https://moula.com.au/finance/understanding-working-capital . Moula was founded to help hard-working business owners in Australia access the funding they need to grow. In the past, getting funding meant going through weeks of paperwork, hassle, and hurdles. We use data to assess your loan application, which means we can keep things painless and lightning-speedy. <br><br>With Moula, you can apply online with no paperwork and no hassle, and have the funds in your account the next day. For more info, check out: https://moula.com.au today.

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What Is Unsecured Business Finance?

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  1. What Is Unsecured Business Finance?

  2. Unsecured Business Finance • What do you do when you need quick business finance without putting your assets at risk? • Don’t have collateral to pledge when looking for a business loan? • The answer is unsecured business finance. 

  3. Here we’ll cover the Types of Unsecured Business Finance and Look at the Pros and Cons to Determine if it’s right for you:

  4. What is Unsecured Business Finance? • By definition, unsecured business finance does not require assets for security. • Secured finance, on the other hand, requires collateral which is usually in the form of residential or commercial property.  • Although unsecured business finance does not require collateral, the borrower’s assets can be at risk if the loan is not repaid. • There is a range of options available when considering unsecured business finance:

  5. Term loan • This is what comes to mind when most people think of business loans. • A term loan is for a fixed period and has a regular repayment schedule. • The main shortcomings with bank term loans are that they require a large amount of paperwork – which can include a business plan – and can have long approval periods of up to two months.

  6. Business Overdraft • A business overdraft enables to you draw extra funds from your regular business transaction account up to a certain amount. For example, if you have a $25,000 business overdraft, you can have a negative balance up to that amount. You only pay interest on the funds you are borrowing at a given time. So if you are only using $10,000 of the overdraft, you will only pay interest on that amount.   • There is usually an establishment fee and a monthly accounting fee while the business overdraft is available. One drawback with a business overdraft is that it can be withdrawn by the bank at any time which could be very difficult if you are having cash flow challenges, to begin with.

  7. Business Line of Credit • A business line of credit is similar to a business overdraft but it’s not automatically connected to your transaction account. You can draw the funds you need up to the limit of the overdraft and repay the borrowed money in that amounts and at times that suit you. This makes it a flexible business loan solution. In addition, a business line of credit is a longer-term solution than a business overdraft. • Note: It should be noted that term loans, business overdrafts and business lines of credit are also available in secured versions. When secured, the interest rate is lower and more funds can be borrowed.  

  8. Credit Cards • Business credit cards are another form of unsecured business finance. There is a range of choices with business credit cards. • No frills cards come with lower fees and lower interest rates. Business looking for more features, such as travel points and travel insurance, will pay higher fees and interest rates for their cards. • Business credit cards can be an effective form of short-term unsecured business finance as most offer a 55-day interest-free period.

  9. Short-term Business Loans • These have been growing in popularity as unsecured small business loans due to the speed and ease of getting approved and funded. • Fintechs (financial technology companies) have developed online platforms where you can easily apply for loans. This includes safely and securely analysing your finances, including bank statements, online to determine your eligibility for this form of unsecured business finance. • An answer is usually provided within 24 hours. Depending on the lender, the loan amount can range from $5,000 to $1 million and the term can range from between three months and two years. 

  10. Making a Decision • Whether you need working capital or want to grow your business, unsecured business finance might be an option that meets your needs. • As with any financial products and services, always check the terms and conditions. Determine whether you can make the repayments and look for hidden fees.

  11. Check These Out! • Moula was founded to help hard-working business owners in Australia access the funding they need to grow. In the past, getting funding meant going through weeks of paperwork, hassle, and hurdles. We use data to assess your loan application, which means we can keep things painless and lightning-speedy. • With Moula, you can apply online with no paperwork and no hassle, and have the funds in your account the next day. • For more info on working capital Check out: https://moula.com.au

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