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Types of business loans

Types of business loans

Explains the various loan types available and their uses.
What do you need to prepare for a business loan application?

At the outset, recognise that different lenders want to look at different aspects of their applicant’s profile and will have different requirements. Our lending experts will walk you through any documentation needed, but if you decide to apply on your own, lenders typically want to see the following documents:

  • Who you are
    • Legal business name
    • Your Australian Business Number (ABN)
    • Business address and contact information
    • Ownership type of company
    • Current owners
    • History of company
    • ID cards with photograph - i.e. passport, driver’s license
    • ID documents - i.e. birth certificate, Australian citizenship certificate, utilities (power, gas, phone) bill, a recent rates notice from your local council, an income tax notice from the Australian Tax Office
  • How healthy your business is
    • Gross annual revenue
    • Notice of tax assessment (past two years)
    • Company tax returns (past two ears)
    • Client account documents
    • Balance sheets/profit and loss statements (past two years)
    • Proof of income - i.e. payslips, letters of employment
    • Business banking account number and balance
  • What you own (can be used as security/collateral)
    • Physical assets - i.e. land, building, equipment, vehicles (documents and photos)
    • Financial assets - i.e. stocks, bonds, crypto currencies
    • Intellectual property - i.e. patents owned
  • How your other business ventures are doing, if any
  • What you owe
    • Debts - i.e. leases, overdrafts, loans, taxes
    • Any other financial obligations that you have
  • How you will be repay your loan
    • Crunch your numbers and know how much you can afford to repay regularly. A well thought-out budget is very important at this stage, as well as cash flow analysis including debt payment schedule, accounts payable, accounts receivable (prepared 90 days prior to lender meeting).

Most importantly, ask your lender about anything you’re unsure about. And if you get stuck along the way, our lending experts are here to help you. It’s important you feel confident about your decision, and it’s our priority to ensure you’re fully informed and clear on loan terms.

Which type of business loan should I choose?

The right loan for you depends on where your business is at and what you’re looking to achieve. Our lending experts are trained to help you identify the best solution, lender and rate for your business so you can move forward with confidence.

We offer a wide range of lending solutions for SMEs including asset finance, cash flow finance, vehicle and property loans, and we’ll take the time to understand your business to find the perfect solution for you. For more information on the different types of finance available, visit our blog or call us on 1300 780 568.

Which types of business loans does Valiant offer?

Valiant works with over 90+ bank and non-bank lenders. Our lending panel has doubled in size since we started helping businesses back in 2015. Because we do not exclusively represent a single lender, we are able to offer a wider range of loan products from our partners and find our customers a tailored solution and competitive rate.

We currently offer:

  • Debtor financing – Leverage unpaid invoices by passing debt onto your lender.
  • Merchant cash advances – Pay your lender with future sales.
  • Commercial property finance – Can have several variants for the purchase or development of commercial property.
  • Overdrafts – Usually attached to a bank account, an overdraft facility lets you withdraw a set amount of funds even when the account itself has reached zero.
  • Lines of credit – A line of credit is an amount of money your business can withdraw at any time, similar in some ways to an overdraft, but it is not attached to a bank account.
  • Business credit cards – A business credit card works just like a personal credit card where you earn points and rewards, but is designed specifically for business purposes.
  • Equipment finance – Allows a business to purchase equipment or vehicles to increase output, produce better products, increase its bottom line, or propel it ahead of the curve.
  • Unsecured business loans – Loans—usually short-term—that do not require any collateral or security.
  • Secured term loans – Loans that requires an asset on the part of the lender as guarantee.
How do secured vs unsecured business loans differ?

Some loans require ‘security’ or ‘collateral’—such as real estate or a vehicle–that the lender can claim in the event of default to recoup any losses incurred. As a borrower, having your asset or property on the line is a good incentive to make repayments on time.

A lender’s imposition of collateral depends in part on their assessment of your creditworthiness. They base these on several factors such as your business track record and credit score. So presenting a positive picture of your company and its reputation also shapes the terms of the loan that you get.