Business loans are of many types and deciding which one is best for you is the main challenge. So let us take an overview of all types of business loans in a detailed manner available in Australia.
Business loan as Term loan
The term loan is common business finance in which you get a lump sum on cash up front. From this, you can repay with interest after a predetermined period. In this, lenders can offer you a loan of up to $1 million and can do faster funding than a bank.
Pros of term loans:-
- You get good cash upfront to invest in your business.
- In term loans, you can borrow more amount than any other loan.
- In term loans, if you use an online lender, your funding gets multiplied faster than a traditional bank.
- Borrowers have a good credit score.
- Strong business strategy.
Business Loan As SBA Loan
This loan is very beneficial for small business administration which is given by banks and lenders. SBA loan repayment depends on how you plan to use the money.
Pros of SBA loans
- Their interest rate is low in the market.
- You can take up to $5 million through an SBA loan.
- You can pay this in the long repayment term.
- For traders who want to expand their business or refinance existing debt.
- For those with strong credit and need long funding times.
Business Loan as Business line of Credit
With the help of a business line of credit, you can access funds as much as your credit limit and you can pay interest only on that money that you’ve drawn. A business credit line of credit gives you more flexibility than a term loan.
Pros of Business Line of Credit
- It offers more flexibility than other loans.
- It is an unsecured type and does not require collateral.
- It is needed in short-term financing as well as it is beneficial for managing cash flow.