An unsecured business loan allows you to borrow funds without providing security.

Even if you do have assets, you may not want to put them in the firing line. Also keeping clear lines between personal and business finance might be a smart way to go, depending on the nature of your business.

Enter stage left…this is where unsecured lending comes in.

There is added risk for lenders with unsecured finance. As a result, you can typically expect higher interest rates.

However, the process of applying for unsecured finance (vs. secure) may save you hours and hours of paperwork and chasing up the necessary documentation…

It’s the perfect option for businesses who need cash quickly, don’t like the idea of risking their assets, or simply don’t have much to put up as security anyhow.

Contributing factors to being successful with unsecured finance include your overall credit worth, time spent operating in business, as well as the financial health, nature and industry of

your business.

Lenders specifically evaluate the following:

-Credit Score

-Time Trading

-Position with the ATO

-Property Ownership

-Balance Sheet

-Repayment History

-Cash Flow Trends

-Income Sources

-Month on Month Sales

-Industry

-Deposits

-Average Cash Balance

Wondering if you qualify?

Your ability to run a profitable business doesn’t necessarily guarantee you will be successful in applying for funds, although it will cast you in a favourable light. As long as you’re not going backwards, and are meeting your repayment obligations, then there is a good chance your application will be successful. (especially more so with non-bank lenders)

What else can help your application be successful?

You want to see ‘Green flags’ (instead of a white one!) as so does the lender.

In particular, lenders love to see multiple directors and / or shareholders, as well as property-backed guarantees. Call it uncertain economic times!

And with low doc loans, only bank statements are assessed and usually your BAS (Business Activity Statements). So more often than not, approval will be based on cash flow and ability to make timely repayments.

Applying for larger loans will not only require bank statements, but other financials including your Profit & Loss Statement (P&L) and Balance Sheet.

In addition, improving the health of your credit score (if it needs it) is the most important thing you can do to increase your chances of approval. It’s all about healthy financial habits.

In this case, past performance IS KEY indication of future performance!

Why are unsecured business loans declined?

Usually by having anything untoward on your credit file (personal or business) - such as a default payment or a court judgement, will more often than not lead your application to being declined.

We recommend getting in touch with a reputable credit reporting agency in Australia.

eg. Equifax, Illion, Experian...

This will give you a snapshot of your credit history through a report, which you can give to us to help assess your situation and eligibility for getting finance approved.

Why don’t you speak with us today about how much you’re looking to borrow?

Get in touch with EZ Finance today.

We help you secure finance the EZ way!