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Business Loans

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Kick off your business faster with a robust business loan

If you’re planning to launch your business off the ground or expand your horizon, having reliable business loans will give you the resources you’ll need!

To make sure you qualify for a loan, you’ll need to provide a convincing loan application and a strong business potential. Those two are among the different factors banks evaluate to determine an excellent business loan applicant from a sketchy one.

How banks evaluate business loan applications

Unlike credit loans and personal loans, banks and lenders are more lenient in business loan applicants.

Business loans are well outside the scope of the National Consumer Credit Protection (NCCP) Act. That means you’ll be ranked in a different system to evaluate the loan risk.

For instance, some banks would rank a business from A to D, where A means low-risk applicant and D means a high-risk applicant.

Besides that, they may also grade you anywhere from 1 to 15, with 1 being the highest and 15 being the lowest. Many factors come into determining a business’s grade, from business strength, age, and other relevant ratios.

From the above example, we can say that having a 1A rating from your bank would indicate a strong application with higher chances of admission. On the other hand, businesses with a 15D rating might not get loan approval.

How can I qualify and apply for a business loan?

Banks and non-bank lenders look into a handful of essential factors when evaluating business loan applicants. Typically, those components include how much funding you’re asking for, your experience in the industry, and your business’s type, assets, and security property.

In other words, businesses that operate in low-risk industries such as retail and sales would have higher chances of qualification because financial failure is less likely.

But keep in mind that there are no policies and guidelines set for qualification and that business loans are always evaluated on a case-by-case basis.

For example, a restaurant startup’s loan application might be rejected even with a secured loan due to the nature of his industry and lack of experience.

However, a business with a well-established foundation and brand with robust income can easily get a six-figure credit line.

How much can I loan for my business?

Business loans can go anywhere from $200,000 to more than $50,000,000, depending on the lender, your business, and their assessment of your application.

The amount you can loan for will largely depend on the bank’s offer, the loan product, and their assessment of your application. But with our help, you will easily find the ideal business loan to suit your brand’s needs.

What loan features are available for business loans?

More often than not, you can apply for all home-loan options on business loans. The only catch is that not all features are available for all lenders.

Hence, seeking the perfect lender for your business is crucial. Once you’ve thoroughly evaluated your loan needs, here’s a quick list of business loan features to familiarise yourself with:

  • Overdraft facility: Having a reliable security property helps you get accepted for an overdraft facility. The bank will also assess your credit before granting this feature.
  • Line of Credit (LOC): Low-risk businesses can have higher limits of lines of credit than startups in higher-risk niches.
  • Interest-only: Depending on your lender, you can enjoy interest-only terms for up to five years or more.
  • Customised interest rates: You can either opt for fixed interest rates or variable rates for up to five years, depending on if you qualify for the feature.
  • Offset Account: Some banks and lenders also offer 100% offset accounts, so you can pay off your business loan much faster and save your money from unwanted interest.

Keep in mind that these loan features could incur fees and charges depending on your bank or lender.

Business Loans FAQs

Can I buy a business franchise using a business loan?

Definitely, there are tons of business franchise loans available for you to check out. Some banks and lenders even offer business loans for large-scale business franchises.

How do lenders see business loans?

Banks and lenders often think of business loans as more profitable ventures. But since businesses loan more funding, it implies a greater risk for the lenders as well.

Nevertheless, loan approval will depend on your loan application’s strength, level of experience, and overall reliability.

Where can I find the best rates for business loans?

When it comes to business loans, banks and lenders are more reserved with their best deals.

Because we typically negotiate business loan rates according to various factors, it’s best to capitalise on your equity position and strengths. You’ll also get better rates most of the time with business equity loans.

To make sure you find the best business loan rates, we suggest teaming up with our expert mortgage brokers.

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Due to the complexity and scale of business loans, most people consider them more daunting to apply for than residential home loans.

Fortunately, we have a team of business mortgage brokers who take pride in years of industry exposure and experience, specialising in business loan applications.

We at Plan A Mortgage will help you qualify for your desired business loan by finding the perfect lender for you. More than that, we’ll gladly help you sort out your business finance.

Call our professional staff at 1300 052 055 to know why we’re the best team in business loans.

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