Banks and other institutions offer a wide range of business financing options. Products, terms and facilities change frequently.
Obtain the most current information before making a choice. Consult the Business Loan Finder.
Take time to read the fine print of Product Disclosure Statements. It will be time well spent as you will be taking personal and business risks in borrowing from financial institutions.
Typical loans on offer are:
- overdrafts and lines of credit - flexible and useful for managing cashflow. Large overdrafts and lines of credit are usually short-term, expensive to service and will be guaranteed by your home or a charge over the business and its assets. Some banks provide established businesses with smaller lines of credit without requiring specific security
- commercial bills are used for funding immediate inventory or stock needs. They provide a fixed sum advance, usually amounts over $100,000, repayable or rolled over between 7 and 180 days. Generally less expensive to service than an overdraft, commercial bills none-the-less require similar guarantees
- leasing, hire-purchase (HP) and other asset-based finance products are used to fund business assets such as motor vehicles, machinery or equipment. They are available from various financial institutions. Security requirements, terms and interest rates will vary too
- factoring is when the business 'sells' its income or debtors. The decision to enter a factoring arrangement should be made carefully. Factoring ensures proceeds are available to a business as soon as a legitimate sale is made. Funds from factoring are injected into the working capital of the business, improving cashflow.
Different business banking products and transactional facilities to consider when opening a business banking account.
Choosing the right kind of business finance can be complicated. Banks and other lenders offer a range of loans including overdrafts, lines of credit and fully-drawn advances. Our Business Loan Finder tool can help you find the best loan for your business.
When applying for a loan, you will need to show the lender a detailed business plan. This information helps the lender to make its decision. The better the lender understands your plan, the better the chance you'll get the right type of finance and advice.
Outlines alternative ways to borrow or access money, including business angels and how they help, venture capital, family loans, floating a company, grants and assistance.
Processes to review your business accounts and facilities before you decide to refinance or switch to another financial institution.