Secure funds for your small business without the pain
Keeping a small business going can take a lot of money. Luckily there are plenty of options for funding and they don’t all involve arduous hustling and pitching to fussy financial institutions.
Australia is a hotbed for entrepreneurialism, with small business and new concepts driving innovation and widespread societal change.
There’s no doubt that this segment of the market is a critical piece of our economy, which is why larger businesses and the government alike spend so much time and resources in trying to figure out how to best support SMEs.
But it can take a lot of money to keep a business afloat, with 25 percent of Australian SMEs reporting they plan to seek out additional finance in the next 12 months. That’s one in four Australian businesses that require additional capital in order to grow or even maintain their current position.
When bootstrapping isn’t enough
For many small businesses, the ideal funding situation is to create positive cash flow and use this revenue to invest back into business growth.
Unfortunately, for many business models bootstrapping simply isn’t feasible and there’s always unforeseen circumstances that can arise.
READ: Understanding cash flow
In fact, there are myriad reasons why new businesses need access to funding, whether that’s to reach a critical mass to become viable, or perhaps to accelerate and already profitable model.
According to research by MYOB, the majority of SME funding still comes from the Big Four banks, even though many business owners would prefer a more short-term solution that doesn’t require them to put up their home as security.
Some of the main reasons businesses seek funding:
- Business growth – once an outfit reaches a certain size, growing pains are likely to kick in, prompting a need for funds (the larger your business, the more chance you’ll need to seek additional funding).
- Equipment costs – are one of the two most commonly cited reasons for seeking financing. In Australia, sole traders and SMEs will use loans in tandem with the $20,000 tax write off to reduce the burden of these costs.
- Working capital – one in five SMEs report they’re often unable to take on new work as a result of cash flow issues, which creates a need to borrow in order to supplement their working capital.
With so many reasons to seek funding and a general unease among business owners with applying for traditional loans, another option has started gaining traction among startups and SMEs: fintech.
How Elyston Hayden made the cut with a fintech loan
Owning and managing a hairdressing salon in a big city like Sydney can be a costly and sometimes overwhelming experience, which is why Elyston Hayden sought to relocate.
His salon, Elyston Hayden Hair needed to find a more affordable base of operations, but the move itself was going to require more money than Hayden had available.
In discussing the problem with his accountant, Hayden ended up applying for a loan with OnDeck – a reputable small business lender promising a fast turnaround on application.
Two days after applying online, Hayden secured the required funding and began the process of moving his hair salon to a warehouse location in Surry Hills.
“It was a fast-approved loan which was hassle free, allowing me relocate and build my business,” said Hayden.
OnDeck and others in the fintech industry are fast becoming a go-to source of funding for SMEs like Hayden’s, where in the past their only realistic option was to try and apply for a loan from the big banks.
And the benefits are clear, with fintech providers offering simpler application processes with less waiting for funds to clear.
Even better, rather than rely on personal credit scores and collateral (like your much-prized family home!), unsecured business loan providers, such as MYOB Loans powered by OnDeck*, take other business health data into account, allowing them to approve loans for businesses that may struggle to get approved elsewhere.
If you’ve already been in business for 12 months or more and you’re wondering how you’re going to afford that next shop outfit, relocation or other large investment, perhaps it’s time to consider what an unsecured business loan could do to help you get to that next level.
Considering a loan? MYOB Loans are short-term loans of just six to 24 months, borrowing between $10,000 and $250,000. Apply today and you could receive funding with nothing to pay until January 2019**
*Loans are issued by On Deck Capital Australia Pty Ltd ABN 28 603 753 215. Loans subject to lender approval.
**Exclusive deferred payment offer is only available to MYOB customers taking their first loan between 30 October 2018 and 30 December 2018. terms of the offer are: loan repayments begin the week commencing Wednesday 2 January 2019; if you choose to accept the offer, the total loan repayment term will be extended by the period of time equal to your loan repayment deferral. Not valid in conjunction with any other offer.
MYOB holds a 30 percent stake in OnDeck Australia and has a referral agreement under which it earns a commission on loans referred to OnDeck Australia.