Startup business basics
So, you’ve got the idea, now you need to make sure your startup has strong foundations. Ask yourself:
Is there a market for my goods and services?
How do I write a business plan?
Will I go it alone as a sole trader or team up in a partnership?
Will I need an Australian Business Number (ABN) and register for GST?
What funding and government grants can I access?
Have I got a business bank account?
There’s a wealth of information for startups online, including some valuable resources from the Australian Government. Do your research now and you’ll thank yourself later.
Business loans to grow your business
At some stage you might need help with funding your business. A business loan could be the answer.
There are plenty of small business finance options available. Let’s take a look at two of the most popular...
Business loans
A business loan is a lot like a home loan. You borrow an amount you can afford, choose between a fixed or variable rate and pay it back over an agreed term. Keep in mind that you may need to use a residential or commercial property as security, particularly if you’re borrowing a larger amount.
Unsecured business loans such as Great Southern Bank’s Business+ Unsecured Loan are available for smaller loan sizes up to $50,000 without security. Plus, you can apply in the Business+ app in minutes, making the whole process simple.
Business overdrafts
If there’s one thing that keeps business owners up at night, it’s cashflow. Making sure you have enough money in your account to pay the bills and to pay your wage is a high priority.
A business overdraft can be your safety net when you need to pay staff or suppliers while waiting for revenue to come in. Afterall, maintaining good relationships with those invested in your success is vital.
With a Business+ Unsecured Overdraft, you’ll only pay interest on what you use, and can also borrow up to $50,000. Bonus - it’s directly linked to your business transaction account so you’re ready to go with the cash when you need it.
What you’ll need to for a business loan as a startup
When you work for an employer it’s easy to prove your financial position. You might have a regular income, long employment history and a swathe of personal tax returns. But when you’re starting a business, well, you’re starting from scratch.
So, what can you show your bank when looking to apply for a business loan or business overdraft?
Experience matters
Many lenders require one year of trading history before accepting a business loan application. It helps paint a picture of how your business runs.
Experience matters. If you’ve run a business in the past, it shows you’re capable of managing a business successfully and will help answer some of the questions your bank may have. If you haven’t, running a business takes a broad range of skills so the experience you’ve accumulated in your industry may still stand you in good stead.
Clear credit
A good repayment history on other debts is a great builder of trust. Your bank will check your credit history and are more likely to come to the party with finance if you don’t have any defaults against
your name.
Chip in
If you’re asking your bank to help finance your new business, they’ll feel better about it if you’re investing a good amount of your own savings too. It shows your commitment to the business and can help reduce the amount you need to borrow.
In the end, your bank wants to know how you’ll repay the loan. A well-crafted business plan and budget can put their mind at ease, but there’s nothing like runs on the board to help convince a bank your business is worth lending to. Consider running your business for a year or more before seeking a loan so you have hard evidence that you’re on the right track.
Next step for your startup business
Unlike some business loan products, you don’t need to wait to open a Business+ Account or Business+ Saver. In fact, having these accounts with the bank can help you when it comes times to apply for a loan. Plus there’s no fees or queues to sign up - open one in minutes easily online or in the Business+ app.
For everything you need to know about running a successful business, visit our online Business Hub.
