It’s almost time to say Happy New Year, 2022 is just around the corner!
Although most Australian small business owners can agree, the past 2 years have been strange, to say the least. With restrictions likely continuing to ease around Australia in the coming weeks, it’s a good idea to get ready for life to go somewhat back to normal. Although your 2021 business plan may have significantly changed halfway through this year, especially if you live in Victoria or NSW, it could be time to redefine your business plan and help your business thrive again.
Most small businesses may find that they would benefit from additional access to capital to really help them leverage the opening back up of business operations. Businesses will also need to move quickly to have an advantage once restrictions are fully lifted and everything is on the path back to normal. A way that you can quickly fund the necessary components of your business is by possibly utilising a same day business loan offered by a fintech company such as Lumi. So let’s look at what same day business loans actually are and how beneficial they can be.
What are same day business loans?
A same day business loan is essentially a sum of money credited to a business on the same day a loan application is submitted. This all happens within 24 hours! It can be very beneficial to businesses looking for quick access to money. For example, if a larger warehouse becomes available or there is an opportunity to purchase a new useful piece of machinery at a good price, then having that ability to quickly access some cash needed to make the purchase is essential.
Same day loans are typically provided by online fintech lenders, they can include small business loans and a business line of credit.
What are small business loans?
Small business loans are funds provided to small business owners by a lender to use for different reasons such as purchasing equipment, covering wages or any business expansion opportunities or working capital improvements.
What are Business lines of credit?
A business line of credit is similar to a credit card in which it gives the borrower access to funds up to a certain limit. The borrower may wish to use those funds immediately or leave them there for future purposes. Once some or all of the money is withdrawn, the borrower then pays interest and makes repayments only on the amount borrowed. Once the limit is repaid the line of credit remains available for the borrower to use again at any point they choose. The line of credit only goes away if the borrower chooses to close the account. The line of credit can also be increased through a new application process, if approved you can have access to more funds in the future.
How are fintechs defined and how have they changed the lending industry?
Financial Technology (Fintech) is the use of advanced technology to provide financial services to businesses and consumers. Fintech relies on integrated technologies accessing secure databases that contain information such as credit scores. Advanced technology can be seen when using streamlined automatic calculators and forms to submit your application. It is these advancements in fintech that are revolutionising the business lending industry making it easier than ever for businesses to borrow money and for lenders to provide borrowers with the money quickly. For example, PayPal is one of the first, most well-known fintech providers that allows for the easy transfer of money internationally. Other examples of fintech providers can include online lenders, mobile banking, mobile payments, online and digital document signing services, and more.
Fintechs vs. traditional banks
Fintechs and banks are similar in the way that they both provide financial services to their customers. Traditional banks still have a lot of red tape in place in regards to lending money and in this way they can often be slow. Sometimes it can take weeks if not months to receive the funds you are applying for from a traditional bank.
As the demands of borrowers are shifting towards wanting their cash more quickly and easily, fintechs have become more attractive to small business owners. With the ability for fintechs to provide same day business loans they can provide a faster, easier service. Lumi has gathered a strong reputation for being a customer-focused online lender and for partnering with small businesses to provide same day access to funds easily.
What is the function of unsecured business loans?
Fintechs have revolutionised how money is loaned, they have specialised in the small business market and have partnered with many small businesses successfully. It is these advancements in financial technology that allow for the quick exchange of funds between lenders and borrowers. The purpose of unsecured business loans is to provide the borrower quick access to money in times of need including emergencies, business expansion opportunities, and purchasing of equipment. An unsecured loan provides money to the borrower without the need for collateral. When lenders assess customers for an unsecured loan it is based on information about the borrower and does not require a valuation of assets. This is a major factor that helps the speed of lending in short term business loans. Coupled with tech advancements in fintech, same day business loans are growing in popularity in the small business world.
Tips to help you secure a same day business loan
There are several advantages of same day business loans including the quick access to money, the ability to acquire the funds unsecured, and the ease of the application. We have listed some tips to help you have a successful application when applying for same day business loans.
- Understand how the application process works to ensure the success of your application. Using online resources you can read reviews and success stories to decide on which lender to apply with as not all lenders have the same processes.
- Ensure that you have income statements or balance sheets on hand for up to two years. It is also a good idea to have your financial statements up to date and your tax returns handy to verify your income statements. Not all lenders will ask for the same information however having it ready to go can improve the success and speed of the application.
- Choose a lender that is renowned for excellent customer service so that if you have any queries you can get them resolved quickly. Lumi provides an automated application process that takes just 5 minutes. You will need to provide your ID, proof of operating and owning your business for 6 months, an ABN/ACN, and a 5K minimum monthly turnover.
The important thing to take away from this is to choose a lender that offers flexible same day business loans, Lumi is a small business loan leader for a reason. They specialise in same day business loans for small business owners. Click here to find out more about Lumi and how they can support your business goals today.
