Business loans check in: Has your cash flow stalled?

A sme business owner is shaking hands with a lender for a business loan

Some Australian banks believe that small-to-medium business enterprises, or SMEs, aren’t really keen on taking out a business loan. 

However, recent data from Small Business Loans Australia suggests otherwise. The problem is, SMEs feel they have to overcome a lot of hurdles in order to obtain a loan. 

Some of these hurdles include:

  • A long wait time before their loan application is approved 
  • Not having assets they can use as security
  • Not finding a good interest rate.

Furthermore, many businesses have found that since the pandemic began in 2020, additional difficulties have become apparent in the loan application process.

However, there are many lenders out there to choose from - each with different loan conditions, and processes that may vary from one another. So the experience can vary and might mean a speedier, and smoother application process, depending on your circumstances and the lender. 

So, as the economy slowly returns to normalcy, you might be wondering whether your business could benefit from a little boost in cash flow. 

Let’s have a look at whether a business loan might be the right decision for you.

A loan might help improve financial flexibility 

A man is trying to boost his business cash flow by using a pump.

As a business manager or director, you might be thinking about the current economic climate. There’s inflation, interest rates and staffing pressures among other things. 

You might be thinking about how your cash flow may be impacted - like a domino effect that begins with high costs and ends with consumers spending less, for example. 

It’s why some SMEs have turned to taking out a business loan to cover their larger expenses, while for some the goal might be to simply jumpstart cash flow.

It seems the money is there for the right applicants: note that lenders approve about 75 per cent of these small business loan applications, as reported by Small Business Loans Australia. 

However, this report also states that if you are a small business, your risk of defaulting on a loan is triple that of a larger business. Something to keep in mind. 

If you plan to go ahead with taking out a business loan, it’s important to do your research and look into what kind of loans are offered.

Financing types - a closer look 

A man is wrestling with a lever of interest rates for a business loan.

There are various loan types to be aware of, of course. For example, a secured loan, which appears to be the more popular financing option. Although, an unsecured loan isn’t that far behind among businesses, according to Small Business Loans Australia.

What do these different options give you?

Well briefly, with a secured business loan your assets may be used as collateral against the loan. This might give you a lower interest rate as the lender’s risk is lower. It’s an option to think about if you intend to borrow a larger amount of money. 

Alternatively, an unsecured loan requires no asset against it but can come at a higher cost. For instance, if your business defaults, you would be held responsible for paying off the debt. As such, it’s a riskier undertaking for a lender. 

This might also mean a lower loan amount is allowed, and typically with higher interest rates. Nevertheless, you might find this type of loan most suitable if you’re only looking to borrow a smaller sum. 

At Mozo, we have more information about business loans which you can find here.

Compare your options

Looking for the right business loan can be overwhelming with so many choices on the market. In saying that, we’ve made the process a little easier for you by including some options below. Have a look and compare business loans today!

Business loans comparison table - rates updated daily

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  • Featured Product
    Boost Business Loan

    Whether you’re looking for a quick cash boost for your business or are ready to invest in growth, ScotPac offers a range of unsecured and secured loans from $10,000 up to $500,000. For loan terms of 6 months to 3 years. No application or account keeping fees to pay. Funds available in 24 hours or less once approved. Repayment options available.

    Interest Rate
    Upfront Fee
    Funding speed
    On application
    Details on application
    From 24 hours
  • Business+ Unsecured Loan

    A simple way to fund your business’s big plans. Borrow up to $50,000 without using your assets as security. A fixed interest rate means your repayments don’t change over the life of the loan. Apply in minutes with the Business app. Enjoy a fast approval process. $495 establishment fee.

    Interest Rate
    Upfront Fee
    Funding speed
    Rates range from 11.95% p.a. to 22.95% p.a.
  • Unsecured Business Loan

    Business Loans from $5,000 to $5,000,000 with high approval rates. Access to funds on loans up to $500,000 in as little as 3 hours. Cash flow friendly repayments and open minded offers.

    Interest Rate
    Upfront Fee
    Funding speed
    On Application
    3%, starting at $399
    from 3 hours
  • Unsecured Business Loan

    A straightforward business loan with no hidden Lumi fees or charges. Speedy application and approval process with fast access to funds according to Lumi.

    Interest Rate
    Upfront Fee
    Funding speed
    from 9%
    Within same day

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