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.
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.
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.
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.
A straightforward business loan with no hidden Lumi fees or charges. Speedy application and approval process with fast access to funds according to Lumi.
A straightforward business loan with no hidden Lumi fees or charges. Speedy application and approval process with fast access to funds according to Lumi.
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When it comes to business financing, a $100k loan opens up a world of possibilities for substantial investments, including:
Expanding operations
Scaling up production
Launching new products or services
Hiring additional staff
Marketing campaigns on a larger scale
Upgrading technology and infrastructure
Acquiring or merging with other businesses
A $100,000 loan can be a powerful tool for the right business. If you have a clear plan for investing this money wisely, and you're confident in your ability to repay the loan, then it may be worth exploring your loan options.
When considering a $100,000 business loan, it's useful to first grasp a few key loan concepts:
Collateral requirement. Loans are categorised as secured (requiring collateral) or unsecured (with no collateral required). Secured loans typically come with lower interest rates, since there’s less risk to the lender.
Loan lengths. The duration of your loan can vary from short-term (ranging from 3 months to 2 years) to longer-term arrangements (lasting 3 to 10 years).
Interest rates. You'll find options for fixed rates, which provide predictable repayment schedules, or variable rates, which might start lower but are subject to market changes over time.
Understanding these basics, here are the primary types of $100k business loans:
Term business loans. With these, you’ll borrow a fixed amount and pay it back over an agreed timeframe.
Equipment financing. This option is meant specifically for purchasing business equipment, with the equipment usually serving as collateral.
Line of credit. A line of credit allows you to draw funds up to a certain limit (for example $100,000) as needs arise.
Below, you’ll find a table that compares these options in detail, helping you weigh their pros and cons:
Term Business Loans |
Equipment Financing |
Line of Credit |
|
Secured/Unsecured |
Can be either |
Typically secured |
Can be either |
Interest Type |
Fixed or variable |
Fixed or variable |
Fixed or variable |
Ideal For |
Large investments like expansion or major projects |
Purchasing or upgrading business equipment |
Short-term financing needs, emergency funds, cash flow management |
Pros |
|
|
|
Cons |
|
|
|
Nabbing a $100,000 business loan is a huge step for any business, and knowing the best approach can make the process smoother and more manageable. Here’s how you can tackle it:
Choose your lender wisely. Dive into some research on lenders that offer sizable loans like this. Compare terms they offer, including interest rates, loan duration and whether they require any collateral.
Organise your financial information. For a loan of this size, the lender will want a clear picture of your business's financial health. This means having your business's financial statements, recent tax returns and a detailed cash flow forecast ready.
Apply. The application might be online, which is typically quicker, or for more complex situations you might need to do this over the phone or in-person.
Go through the assessment. For larger loans like this, lenders will generally do a lot more due diligence than on smaller amounts. So be patient as they check your credit, evaluate the financial stability of your business, and, if you’re going for equipment financing, appraise the equipment's value. Keep in touch with the lender and be ready to provide any extra information they might need to speed things up.
Receive your funds. Once your loan is approved, how the funds are handled will depend on the loan type. For term loans, the funds are typically deposited directly into your business bank account. For equipment financing, the lender pays the vendor directly. With a line of credit, you can draw funds as needed up to the approved limit.
Navigating the application process with a clear plan can streamline your experience and increase your chances of securing the necessary funding for your business.
Before you apply for a $100,000 business loan, you'll want to check that you're eligible. While eligibility requirements differ between lenders, some of the more common requirements include:
Being fully registered with an active Australian Business Number (ABN) or Australian Company Number (ACN)
Be in business for a certain amount of time, usually between 6 months and 2 years
Having a minimum annual turnover, which can be at least $40,000 per annum
Having a clean credit score and no outstanding tax bills
Make sure to check the specific requirements of the business loan you are looking into.
For more flexible business finance options, you may want to consider business overdrafts or business credit cards and lines of credit.
A business loan of $100,000 is a significant amount of money, so it’s important to look for a competitive interest rate when you start comparing options.
Interest rates can depend on factors such as the loan term, your business's creditworthiness and the economic environment. Depending on the lender, interest may be charged on a weekly, fortnightly or daily basis. In some cases, there may not be an interest rate with the loan, as the lender could provide you with a customised interest rate if your application is successful.
That means the amount of interest you’ll end up paying can vary widely based on your unique circumstances.
But to provide an illustration, suppose you take out a $100k term loan at an annual interest rate of 12.99%, with the interest calculated monthly. Over a 7-year term, your monthly repayment would be approximately $1,818.65. By the end of the loan term, the total interest you would have paid amounts to approximately $52,767.
Taking out a business loan could see you paying fees like application fees, ongoing fees, valuation fees, exit fees, and any late payment fees if relevant:
Application fees. A one-off fee charged at the start of your loan - keep in mind these can either be written as a dollar figure or a percentage of the total loan amount.
Ongoing fees. This is typically a maintenance fee paid each month over the course of your loan.
Valuation fees. If you’re taking out a secured business loan, a valuation fee covers the cost of assessing the value of your collateral asset.
Late payment fees. As the name suggests, if you’re late to make a repayment on your loan, you could be slapped with a late payment fee.
Exit fees. If you’ve paid off your loan before the loan period ends, you may be asked to pay an exit fee.
Be sure to read the terms of your business loan to see if any other fees apply.
Once you’ve found the right business loan for you, you'll want to have all the necessary documents needed for smooth application. The details you’ll need to submit an application will depend on the lender, however some of the more common documents you might be asked to provide are:
Your drivers licence
Your ABN or ACN
Financial information, such as your bank account and tax records
A business plan
