If you are an entrepreneur, you must know the challenges you face while running a business. There will be a lot of ups and downs during the initial stage. And after you (your business) achieve the required position (in the industry), you get the investors, then there is the expansion of your business, and more cash flow is needed. These are the times when entrepreneurs look for flexible lending solutions.
There are several alternative lending solutions you can choose from, such as SME loans, equity loans, property-based loans, etc. Because of this option, many Aussies prefer alternative lending for their financial needs. This type of lending is more viable for them, and it helps them run their business smoothly.
The article will list a few of the major flexible loan options that Australian citizens have:
The unsecured loans
Many banks will ask you to pledge an asset or a payback guarantee while lending you the money. But, it is not the same in the case of an unsecured loan—in fact, that is how it got the name. You can borrow the required amount without any collateral asset or item worth the amount, and by this method, you can reduce the risk of foreclosure.
Let’s assume a scenario where you need to finance a machine/equipment, renovate your shop, or make a down payment for a new office space. If you are in need of a small sum of money for this purpose, you can opt for microloans. When you go for microloans, you will not have to carry the burden of big and long-term loans. Though these loans look like a great option, you need to check the interest rates carefully, as sometimes they may put higher rates than usual.
In recent years, crowdfunding has become the new talk of the town. It is easier to get funding for your cause if people have faith in you. All you need to do is convince the public to fund your cause/business/project. In return, you offer people the shares of your company, and as the company makes a profit, the share value also increases.
You can get your customers involved in crowdfunding if they are loyal and interested in your products and services. Getting this type of flexible lending by the people is more of a straightforward approach to business and society.
Are you and your partners in business entitled to a good amount of pension? If the answer is a yes, this is a great deal. You have the option to apply for pension-led loans.
For example, your annual pension is $70,000. You can take a pension-led loan of around 13,000 to 16,000 (approx 20 to 30% of your total income). Although this is a great option, you cannot rely on this method for a large sum of money.
You can find several government initiatives that offer new and fledgling businesses to apply for development loans. These loans are generous because of the policies and they come with lucrative add-ons such as a support ecosystem, fixed interest rates, and access to valuable resources.
Some famous Australian govt. grants are:
- The Export Market Development Grant
- The Entrepreneurs’ Programme
- The Australian Landing Pad
- The CSIRO Kick-Start
These are the flexible lending/loans available for entrepreneurs and businesspersons. So, do thorough research and choose the loan that suits your needs and will help in running your business successfully.
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