Business loans – what you need to know?

Understanding business loans

Wondering what a business loan actually is? Let us explain. Business loans are simply loans that are intended for specific business purposes. Much the same as most loans, a business loan is repaid over an agreed-upon period of time and will accrue interest over the life of the loan. If you’re looking for a business loan there are a number of different credit providers that could provide assistance. These may include a bank, credit union and some online lenders. Still, wondering what a business loan is and who can get one? Maybe you’ve been googling ‘business loan repayment calculator’ or ‘business loan interest rate’? If so, we recommend you keep reading to find out more.
Business loans

What is a business loan?

A business loan is simply an amount of cash that is borrowed to cover business-related purposes. What are business-specific purposes? Business-specific purposes could be anything from starting up a new business to buying equipment or supplies for an existing business. Many small business loan applicants will access a business loan through a bank, however, there are some online microlenders who provide business loans. At Personal Loan Pal, we do not provide business loans. That being said, we do approve personal loans for a variety of different financial circumstances.

Who qualifies for a business loan?

So, now you know a little more about what a business loan actually is, let us explain who qualifies. In most cases, lenders providing business loans will have their own application criteria. However, according to business.org, there are a few factors that most lenders will consider when assessing a business loan application:

  • Your credit score – a lender might look at your credit score in order to assess whether or not your credit history constitutes approval for a business loan. If your credit score is good it shows a potential lender that you are capable of repaying the loan. It is important to be aware of how your credit score could affect a business loan application.
  • Collateral – debt that is backed by collateral is viewed as less risky to a lender. This means that collateral-based loans are often easier to acquire and may have lower interest rates;
  • Time in the business – it can be challenging for new businesses to gain approval for a business loan due to the increased risk associated with start-ups. That being said, there are lenders who provide start-up business loans.
  • Cash flow – a potential lender might look at the debt-to-income ratio of a business when assessing it’s eligibility. Businesses with higher incomes are often more likely to gain approval for a business loan;
  • Debt load – businesses with higher amounts of debt may find it difficult to gain approval for a business loan;
  • The industry – a potential lender might assess the risk associated with the industry when assessing eligibility for a business loan.

What can I use a business loan for?

Wondering what expenses a business loan could cover? It is important to keep in mind that all business loan providers might be different, however, you might be eligible to apply for a:

  • Business car loan;
  • Short term business loan;
  • Long term business loan;
  • Unsecured business loan.

Secured vs. unsecured business loans

So, what is the difference between a secured and unsecured business loan? It’s pretty simple, really. A secured business loan is backed by collateral. That means the applicant might put a car, motorbike, boat or other large assets against the business loan as security. If the loan is not repaid the lender may have the right to take ownership of the asset. An unsecured business loan does not require an asset as collateral. Unsecured loans are typically for a lesser amount of cash and, therefore, are less risk to the lender.

Business credit cards – what are they?

Are you looking for a way to access fast cash to fund your business? Are you wondering what the difference between a business loan and a credit card actually is? Let us explain. The real difference is just the fact that you are provided with a card that can be used anytime and almost anywhere. This can be a positive thing, however, can also be very risky. A business credit card can rack up huge amounts of debts in a short period of time if used liberally.

That being said, if a business credit card is used for controlled spending it can be used to build your businesses credit score so you can apply for a loan that might have a better interest rate at a later date. It is important to keep in mind that a business credit card can have a positive impact on your credit score, but it can also increase your debt-to-income ratio.

Personal Loan Pal: who are we?

Personal Loan Pal is your local lender finder with a difference – we are 100% online. What does that mean? With Personal Loan Pal, you can apply for a personal loan wherever you are and whenever you like. We don’t mess around with pages and pages of paper forms. We won’t ask you to complete long-winded questionnaires and you won’t need to step foot outside your house. At Personal Loan Pal, our team cut straight to the chase so you get the cash you need when you need it. We’re here to make gaining approval for a personal loan as easy as possible.

The Personal Loan Pal team understands that when you need fast cash there is no time to waste. So, whether you’re looking for a fast loan in Darwin or a quick little loan in Tasmania – Personal Loan Pal is always in your back pocket. We could match you with the perfect local lender in just minutes. You could head to the top of the page right now and apply for cash between $2,000 and $50,000 right now. The good news is if you submit your application during AEST business hours our team will do their best to get back to you with an outcome in just 60 minutes. Talk about speed and convenience!

Who can apply?

Like what you hear? Thinking about submitting an application for a personal loan? The good news is, at Personal Loan Pal, we like to keep our application criteria as simple and straightforward as possible. Here’s what you’ll need to meet before getting started on an application:

  • You must have an active mobile number and email address;
  • Applicants must be over the age of 18;
  • A regular income must have been deposited into your own personal bank account for the last three months;
  • Applicants must have internet banking set up;
  • You must be able to prove you are an Australian citizen or permanent resident.

It’s as simple as that! If you can say ‘yes’ to the criteria above you could scroll up right now and get cracking with a Personal Loan Pal application. Don’t waste any more time, apply now!

What documents will we ask for?

As you will have already realised, we keep things as simple as possible at Personal Loan Pal. However, our assessment team will need to submit a few important documents to a potential lender. Here is what we recommend you have handy:

  • Personal info (name, D.O.B etc.);
  • Your internet banking details;
  • All applicants will need to provide the reason you are applying for a loan;
  • Your MyGov details (if you receive Centrelink benefits);
  • Your employment details and employer contact info;
  • All applicants must be able to prove they are Australian citizens or permanent residents.

What about bad credit?

Worried that bad credit will stand in your way? At Personal Loan Pal, we look for lenders that could provide loans to individuals with poor credit scores. The Personal Loan Pal team submit your application to a wide variety of different lenders, some of which could take a fresh approach to bad credit. We do our best to match applicants with responsible loans, our team will never approve an applicant who does not have the means to repay the loan. We pride ourselves on our commitment to responsible lending.

How does it work?

Choose a loan amount

Head to our home page and use our loan calculator to select a loan amount and how long you think you will need to pay it back.

Choose a lender

The Personal Loan Pal team will show your application to a variety of different lenders. We’ll show you the options so you can decide who you’d like to borrow from.

Cash to you

Once you’ve signed an agreement with your new lender the cash will be on its way to your account!

Loans Australia could be the answer to your money woes. Let PLP find you a lender today!