Short-Term Bridging Loans: Fast Finance for Start-Ups
Applying for new business loans can be an essential step toward success. But how do startups get funding? SMEs across Australia can access cash flow thanks to short term business loans. That level of finance can be transformative for your startup’s long-term goals, we explain how to access a loan by choosing the financial solution that suits your startup goals.
It is good business practice to pursue a low-risk financial solution. All startups have similar issues as they develop—the need for capital to drive growth. This is “seed capital” and can keep your business afloat during challenging early years. Short-term bridging loans can be an excellent form of lending for startups. You can use this funding to:
Invest in new technology
Hire talented employees
Expand business premises
Cover essential overhead costs
This type of financial solution offers quick approvals and you do not even need a strong credit history. As long as you can prove you can meet repayments you may well be successful.
If you are considering fast finance loans you will notice many options available, which include traditional and alternative lending. However, it’s difficult for some startups to make a successful application through conservative lenders such as banks. That is due to being a new business—you may have limited income or a credit history that is not strong enough. Your trading history is a big part of whether a loan application is successful. Before applying you need to consider your:
Annual income
Credit history
Lending requirements
Ability to meet repayment schedules
In many cases, new businesses will use term lending. It’s a cash lump sum you pay back (repayments) over a set time. This can be up to 48 months, but you will agree on the time with your lender. During the repayment phase, you will pay interest on the loan amount—usually at a variable rate.
Before you apply for a financial solution, make sure to gather key documents. To improve your chances of successfully applying for a loan you may need your:
Business plan: You will need to prove your business roadmap has the potential to be successful. Highlight your earnings and the goals for your startup in the months ahead.
Financial data: You will need to confirm your current financial health, expected earnings, and credit history.
Repayment potential: Meeting a repayment schedule is crucial for application success. Highlight to lenders your business budget— this will prove you can pay back the loan.
Assets: Highlight that you have collateral (personal assets) for use as security. This will you can repay the money you borrow. This may be an item such as a home or vehicle.
