What's different about Spotcap unsecured loans?
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It’s your business, so you choose how to use the funds. Our unsecured business loans are a versatile solution for both short- and long-term activities.
Qualification and eligibility criteria
What we look for in applications
How does an unsecured business loan work?
Our approach is focused on simplicity and flexibility
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What is an unsecured business loan?An unsecured business loan is financing that doesn’t require the borrower to put down collateral as a guarantee — e.g., expensive machinery, vehicles, or property.
With unsecured business lending, applicants are assessed based on their real-time business data and their projected ability to pay back within the loan’s term. This type of loan is also faster to set up and repayment can last up to 24 months.
Why don’t I need to provide security?Lenders offering secured loans use high-value assets as a safety net against the possibility of the borrower defaulting on the loan. It’s a way for them to protect themselves against risk. Security is most commonly used either when the loan amount is high or when the lender has limited access to information about the applicant’s business. Many secured lenders rely on credit scoring and historical data, which can quickly become out of date or don't provide a detailed enough picture.
Unsecured lenders like Spotcap take a different approach — we use technology to get a better understanding of a business’s circumstances. Rather than rely only on credit scoring, we review real-time business data which gives us a more holistic, detailed and objective view of your business’s health and performance in the current moment.
As a result, not only can we provide financing without collateral, we can also reach a decision faster (within one working day), saving you valuable time and enabling you to take advantage of opportunities quickly.
Who is an unsecured business loan for?An unsecured business loan is beneficial for businesses which don’t own tangible high-value assets — the reality is that many small and medium-sized businesses in Australia only need a rented space, some small pieces of equipment and inventory. For this type of enterprise, secured business loans are challenging to get, which can interfere with their ability to grow or even operate.
What’s the difference between a business loan and a line of credit?Business loans are often term loans, meaning they provide a single amount of credit that needs to be repaid within a set time. Interest and fees are included in the repayment schedule. Loans are generally of higher amounts compared to credit lines, and with a fixed repayment schedule businesses can predict their payments each month. The tradeoff is that borrowers have limited flexibility, and still pay for interest on the whole loan amount even if they haven’t used all of it.
Business lines of credit give a borrower more flexible access to funding. A lender agrees on a maximum amount of credit(e.g. $500k) from which a borrower can withdraw as much or as little as they need, until they have reached its limit. Repayments are then based only on the funds that have been withdrawn.
Spotcap’s approach combines these two types of financing. When approved, you gain access to a line of credit of up to $500k, which will be available for up to three months. You will not be charged for the credit line until you draw down funds, meaning that you can adjust your plans without incurring costs even after you’ve been approved. Once you draw down, each withdrawal becomes a separate business loan, which has its own repayment schedule that can last up to 24 months.
What should I consider before applying?While an unsecured business loan has many use cases, there are certain situations when another financial arrangement might be better suited to your needs.
You need a more substantial long-term investment. For example, you might be in the process of purchasing property for your enterprise. While our credit lines can extend up to $500,000, this might not be enough to cover all of the expenses as a sole source of financing. Instead, you could combine it with another type of financing, or use it to partially refinance an existing loan. The best course of action is to consult with a financial advisor to make the most of your options.
Your business is at a start-up stage or is very young. If your company has operated for less than 18 months, our financing wouldn’t be suitable for your situation.
What are the fees with a Spotcap loan?There are no application fees, meaning you will bear no costs for being approved for the credit line.
There are no early repayment fees. After one month from drawing down, you can repay the full credit amount without incurring any penalties. This gives you the option to turn the credit line into a short-term facility.
The cost of financing with us includes the loan’s interest rate — which is based on your risk profile — and a drawdown fee that is charged per withdrawal as a percentage of the borrowed amount. Click here to learn more about our pricing.
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