What is different about a small business loan from Spotcap?
How a small business loan from Spotcap works
Spotcap's loans are in the form of a line of credit
Spotcap loan payment calculator
Want to talk to us
For more details on eligibility and required documents, call us on 1800 10 70 10 or request a callback
We’re trusted by thousands of growing businesses
Jennifer is one of many Australian business owners who has used Spotcap to grow. Read more about other aspirational SMEs we have financed
“Spotcap’s online process was simple and straight-forward and I was approved for finance in no time at all.”
Accounting softwares we are integrated with
Understanding Small Business Loans
Information about small business loans you need to know as a business owner
How much collateral is needed for a small business loan?
- When businesses apply for loans, the lender may ask for security or collateral in case the loan goes sour. Traditional lenders, like banks and credit unions, tend to ask a business to put up some collateral against their loan, such as property or stock. Other lenders, like alternative finance providers, offer finance that isn’t attached to collateral. Interests rates with these lenders can be higher.
- An unsecured business loan and an unsecured line of credit are types of finance based solely on a business’s creditworthiness, history and financial condition. These options don’t require any collateral or personal guarantees, making them attractive solutions for healthy small and medium sized businesses that want faster access to credit.
What questions will I be asked when I apply for a loan?
- When it comes to obtaining a small business loan, it helps to put yourself in the role of the lender that you’re interacting with. If you were in their shoes, what would you like to know about the business you’re lending to? What would make you feel confident about lending them money?
- Requirements vary between lenders, but some common questions to expect surround your business performance, financial projections and the purpose of the loan. A lender may ask to see historical financial documents and accounting data, as well as your budget and projections. How a lender obtains and processes this information – and how fast they do it – depends on the their approach to both technology and risk.
Why do small businesses need access to finance?
- After the 2007 financial crisis, SMEs were assaulted on two fronts. They suffered a drop in demand for goods and services and a squeeze in access to credit. Lending to small businesses was tightened drastically. This is an issue as access to finance is one of the biggest challenges to the creation, survival and continued growth of small and mid-sized businesses. Fortunately, the economy has made a partial recovery and SMEs have a greater access to finance.
- Sometimes, small businesses struggle to keep growing, or require extra working capital to accommodate unexpected expenses, purchase stock or meet seasonal demand. Many small businesses find themselves needing additional funds to finance commercial opportunities or keep day-to-day operations running smoothly.
- Often reliant upon clients fulfilling invoices, small businesses also use credit to manage their cash flows. Maintaining a healthy stream of working capital is a pain point for small businesses, especially as they balance late payments and unpredictable demand with fixed overheads like rent and payroll. These imbalances cause small businesses with a lack of working capital to struggle.