No home, no loan: Not owning property hurts young business owners

By Niko Iliakis · · 2 min read
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The banking Royal Commission and resulting credit squeeze has made property even harder to come by for young Australians. And according to a new report from MYOB Business Monitor, this has worsened the situation for young business owners trying to secure business financing.

The report found that nearly half of Gen Y small business owners had applied for financing last year - much more than their Gen X and Boomer counterparts - and more than a third had their applications declined.

Lack of collateral coming back to bite Gen Y businesses

This is a common problem among younger small business owners. Many apply for a loan in a bid to boost profits and productivity, only to be turned down because they don’t have the necessary assets to put up as security.

But if home ownership among younger generations of Australians is in decline, and property is often a requisite for obtaining business financing, what does this mean for the small business community?

According to MYOB CEO, Tim Reed, it should sound warning bells.

“This isn’t something you can pin on smashed avo. Australia’s youngest small business owners struggle to get access to finance because they’re less likely to own their own home,” he said.

“Many of us have believed tying business loans to home ownership has been a problem with the lending system that has existed for years, but for the first time we’re now seeing the generational impact.”

A new breed of lenders offers a solution

The right business loan can open the door to extra staff, renovations, and investment in new equipment, not to mention make sure your business has enough capital during periods of low cash flow.

“If cash flow causes problems, the wheels can fall off very quickly in other areas, so making sure businesses can get paid on time should continue to be an absolute priority for all,” said Mr Reed.

Nowadays, many Australians are turning to online business lenders to get the funding they need. This new breed of lenders often let business owners borrow without having to put up large assets like property as collateral.

Streamlined application processes also mean business owners can receive funds within 24 hours, allowing them to take advantage of opportunities to grow their business sooner rather than later.

For a look at the kinds of loans offered by online lenders, be sure to head to our unsecured business loans comparison page, or check out some of the options below.

Unsecured business loans - rates updated daily

Search promoted business loans below or do a full Mozo database search. Advertiser disclosure.

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    About Great Southern Bank
    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.
    $495
    Varies
    Go to site
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    About Bizcap
    Unsecured Business Loan

    Business Loans from $5,000 to $2,000,000 with high approval rates. Access to funds 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
    Go to site
    Details
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    About Lumi
    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
    Go to site
    Details
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    About Prospa
    Prospa Plus Business Loan

    Prospa uses risk-based pricing to determine your interest rate. They look at factors including your industry, years in business, cash flow, creditworthiness and the overall financial health of your business.

    Interest Rate
    Upfront Fee
    Funding Speed
    Interest rates vary based on risk.
    3.5%
    from 24 hours
    Go to site
    Details
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    About Octet
    Invoice Finance

    Increase cashflow by unlocking the power of your receivables with Octet’s Invoice Finance solution. Receive up to 85% of your debtor’s ledger with tailored facilities ranging from $100K to $12M.

    Interest Rate
    Upfront Fee
    Funding Speed
    0% for the first 60 days, then rates starting from 9% p.a.
    On Application
    Instant on approval
    Go to site
    Details
  • placeholder
    About Great Southern Bank
    Business+ Unsecured Overdraft

    Manage the cash flow in your business with ease. Access up to $50,000 without using your assets as security. Lending criteria apply. Access your available limit from your linked Business+ Account. Use your Debit Mastercard for added convenience. Interest is charged on your balance owing, not your limit. Easy online application. $495 establishment fee.

    Interest Rate
    Upfront Fee
    Funding Speed
    Rates range from 14.95% p.a. to 25.95% p.a.
    $495
    Varies
    Go to site
    Details

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