Applying for new business loans can be an essential step toward success. But how do startups get funding? SMEs across Australia can access cash flow thanks to many forms of finance including short-term bridging loans.
In fact, you may be able to get lending between $300k and $7.5 million when your finance broker applies to Aquamore for commercial finance. This level of finance can be transformative to enable your startup’s long-term goals. In this guide, we explain how to access a loan—speak with your finance broker about what’s involved with choosing the financial solution and lender that suits your startup goals.
New Business Loans Can Be Short-Term or Long-Term
There is a need for capital to drive growth. This “seed capital” injection is often utilised to support sustainable growth.
Aquamore provides short-term bridging loans of between $300k and $7.5 million in debt size. This funding is commonly used by companies to:
- Invest in new equipment or technology
- Hire talented employees
- Expand business premises
- Cover essential overhead costs
Aquamore is also renowned for its solution-orientated approach to business startup loans. All loan applications are viewed holistically. In addition, Aquamore considers business borrowers with varied credit history.
The Benefits of Short-Term Startup Company Loans
Short-term bridging loans can be a fast, flexible lending solution:
Why it’s Often Harder for Start-ups to Access Funding Through Traditional Lenders
Typically, non-bank lenders, fintechs and private lenders have a wider appetite to support startups versus banks, which tend to be more conservative. This is often due to traditional lenders preferring an established credit history. This usually includes a demonstration of:
- Annual income
- Credit history
- Lending requirements
- Ability to meet repayment schedules
As mentioned earlier, non-bank lenders, fintechs and private lenders tend to be more flexible with trading history and the corresponding documentation required.
Loans are typically in a ‘term lending.’ structure whereby a cash lump sum (or fully drawn advance) is provided at the start of the loan term, which is then progressively paid back to the lender (or amortised) over a set amount of time.
Pending on the use of funds, and type of loans, this could be for a few months up to a few years (or longer). Whether the loan is fixed or variable, will depend on the lender as well as your business requirements.
Your Checklist for Startup Business Lenders
Your finance broker will advise the documents required to support your loan application. These may include:
- Business plan: Demonstration of your business roadmap including an outline of incomings, outgoings, milestones and measurements.
- Cash Flow Forecasts: It’s wise to involve your accountant when preparing business forecasts to ensure they’re realistic.
- Repayment potential: Meeting a repayment schedule is crucial for application success. Lenders are keen to see a clear demonstration of how (and when) the loan can be realistically repaid.
- Security: Identify the assets that will be used to secure the loan (such as a property).
Raising Money for a Brand New Business
Consider, in collaboration with a finance broker, whether your requirements more suit a secured business loan or unsecured business loan.
A secured business loan requires collateral (such as a house), whereas, as the name suggests, an unsecured loan doesn’t usually require a substantial asset to back the loan. That said, rates, terms and conditions will vary substantially pending on the loan type, security, amount and term.
In addition to collaborating with a finance broker, it’s also wise to seek counsel from your accountant prior to seeking funding.
Key Considerations When Considering Startup Funding
There are several factors to consider before applying for a short-term bridging loan. These include:
- Interest rates: These determine how much extra you will pay on top of your borrowing. These rates can vary over the life of a loan, so be sure you’re aware of the rates and terms before committing.
- Loan terms: Carefully assess the lending terms. You will need to examine your repayment periods, fees (such as origination costs and repayments), and the repayment period.
- Collateral requirements: You may need to provide collateral, such as property, to obtain a loan.
- Long-term outlook: It’s important to select the type of financial solution that supports your short, medium and long-term objectives. It’s wise to discuss all aspects of a loan with a finance broker in collaboration with an accountant.
Startup funding is achievable. Discuss the options available with your finance broker.
How to Apply for a Start-Up Business Loan
Different lenders will have different documentation requirements. These often include:
- Financial statements
- Proof of income
- Identification
- Bank statements
The good news is Aquamore’s short-term lending is straightforward. Applications are simple and we assess the loan request quickly. If you are ready to find out more, get in touch with your financial broker can begin the application process.
Access Up to $7.5 Million in Funding for Startups
You can begin the application process now for startup business loans in Australia. At Aquamore, we have quick approvals. We offer:
- Confidential assessments
- Loans from $300k to $7.5 million
- Flexible terms and repayment structures
- A holistic approach to applications, including the consideration of businesses with limited or poor credit history
Aquamore is not an accounting, tax, business, or legal advice service. This guide is for information purposes only. Consult a professional advisor for advice relating to your business ventures or if you plan to apply for a loan based on this feature.
