4 types of finance to get your business back on track for 2021

By Katherine O'Chee · · 3 min read
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Small business owner reopening store

After a tough year for many businesses, things are looking up at long last. New data from the Australian Bureau of Statistics (ABS) show that revenue rose for 24% of businesses this month. 

Indeed, with more Australians now out and about, Christmas could present a great opportunity for your business to boost its sales even further so you can start off the new year strong and in the green. 

“One in five (22%) businesses indicated they have capital expenditure plans over the next three months, with about three quarters (73%) of these businesses expecting to spend the same or more than what is usual for this time of year,” ABS’s head of industry statistics, John Shepherd said. 

Whether you’re looking to purchase more supplies or build out your digital presence to attract online shoppers, having extra funds at the ready could make all the difference over this busy holiday season. 

That’s when an alternative non-bank business loan comes in. With applications that take just minutes and funding in 24-48 hours, these business loans are an easy way to secure the finance you might need over summer. 

With that said, there are a number of different loan options out there, some of which might suit your business needs better than others. 

Scroll down for four types of business finance to help you get the ball rolling for December …

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Last updated 15 January 2025Important disclosures

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1. Line of credit

Want to be prepared for the uncertainty ahead? If you’re looking for a business loan that can support any ebbs and flows in your cashflow, you might want to consider a line of credit. 

Much like a credit card, a line of credit involves the lender approving your business for a certain value and from there you can withdraw as much funding as you need, up to that limit. 

The good news is, unlike a standard business loan where you would be charged interest on the whole loan, you can avoid interest costs on the funds left untouched in your drawdown facility. Just be mindful, however, that you may need to pay a line fee to keep that credit available for you to use.

2. Invoice finance

The last thing you might want as a wholesaler or consulting firm is slow-paying business customers tying up your cashflow just before Christmas. That’s where invoice finance could be a lifesaver, as it’s a line of credit that allows you to gain access to those unpaid invoices now rather than later. 

With invoice finance, your provider will generally give you up to 85% of your invoice amount upfront. They will then send you the rest (less any fees or charges) once your customer’s payments have come through. 

As alternative business lender Octet’s head of marketing Duncan Khoury explains, invoice finance can “[allow] you to capitalise on opportunities and keep your business growing - particularly where some debtors can take up to 60 days to pay.”

And because it’s secured against your business’s unpaid invoices, it’s “extremely advantageous in situations where you don’t want to risk the family home,” Khoury says.

3. Trade finance

If you have suppliers across the globe, trade finance is a line of credit that helps you pay for your local or overseas stock immediately. Essentially it closes the funding gap between your business buying those supplies and selling them to your customers. 

Khoury says trade finance means your business can take advantage of any early payment discounts. And with more international suppliers now requiring upfront deposits in times of economic uncertainty, it’s a good workaround if you haven’t got enough funds in your own bank account.

When shopping around for a trade finance product, look for a lender with generous repayment terms and other perks like an interest-free period. For instance, Octet gives businesses up to 120 days to repay, with 60 days interest-free.  

Another feature to compare is the foreign exchange rates offered by different lenders, says Khoury. 

“Some trade/supply chain loan facilities feature inbuilt foreign exchange, which is inherent in most international business transactions. Accessing better FX rates than the big 4 banks can help improve your business’ profit margins, allowing the saving to be reinvested back into your business,” he says.

4. Unsecured business loan

If your main concern with applying for a business loan is the collateral requirement, you’ll be happy to know there are certainly unsecured options available in the market. 

As the name suggests, with an unsecured business loan you won’t need to put up any assets (e.g. your family home) as security in order to be approved. The lump sum loan you receive can then be used to fund any business plans for growth and expansion, be it hiring more staff or buying new equipment. 

Bear in mind though, that because unsecured business loans are riskier for the lender, they may come with higher interest rates, stricter eligibility criteria and smaller loan amounts than secured loans.

What’s next?

Ready to get started? Check out a few eye-catching business loan offers in the table above, or head on over to our business loans comparison hub for even more deals from bank and non-bank lenders.

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