Applying for a small business loan is a big deal and there are many factors to consider. Doing your research and making an informed decision can make the world of difference to the success of your business.
Take into account the following factors:
- Do you really need a loan?
- Can you afford repayments?
- How much money do you need?
- How long will you need it for?
- What type of loan do you need?
- What security does your business offer the lender?
- What stage is your business at (start-up, etc.)?
Does your business need debt finance – where you borrow funds and pay those funds back with interest and within an agreed time frame? Or perhaps equity finance would suit your business better – where you ask for investment in your business for part ownership.
Consider all start-up and operating costs associated with your venture. Check out the Westpac Bank website for an idea of some of the costs that may be involved. Also allow for contingency funds to cover your costs whilst your business gets on its feet.
Calculate what type of loan is right for your business and compare different loans offered using the Info Choice calculator.
Business Victoria also provides a cash flow template to help small business owners understand their cash flow and work out what loan to get.
For more help in starting or building your business book an appointment with Small Business Smart Business. A 1.5 hour session will only cost you $50 with an industry expert.