What is a small business loan?

A small business loan is a form of funding arranged between a business and a financial institution such as a bank or an alternative lender. As a finance broker, Sure Capital has been assisting Australian businesses to get access to small business loans for buying equipment, stock purchases, hiring staff, general cashflow requirements or purchasing commercial property. A small business loan funds operating costs and capital expenditure. When talking about small business loans in Australia, they are known under many different forms.

Each of these business finance options come with slightly different requirements. “Unsecured business loans” are fast and easy to get access to, and usually takes the form of short term finance to take advantage of an opportunity to grow or expand the business. “Short term business loans” are often used to cover cash flow issues over a short period of time. “Secured business loans” require securing the funding against an asset or collateral such as property, plant or equipment.

In some cases, a loan’s collateral can also be the cash flow generated from future accounts receivable. Other popular types of small business loans, alternatively to the ones offered by the standard business loans that the banks provide, are “business line of credit”, “Merchant cash advance”, “Invoice Finance Factoring” and “Equipment Finance”. Nowadays, many Australian small businesses have a loan facility of some description used for all different sort of purposes.