Financing can be very limited to small business owners like you because of the inherent risks associated with budding entrepreneurs and their companies. Nonetheless, there are loan options out there that are helpful for small company owners – one of them is ABN loans.
If your startup is planning to look into ABN loans and how they can be potentially useful, check out the following points. Continue reading.
What Are ABN Loans
ABN loans are loans that registered businesses in Australia can take advantage of. For an Aussie business like yours that’s looking for a source of funding, this type of financing only uses a company’s registered ABN info, wherein a lender can check creditworthiness before proceeding to guarantee a loan. It’s said that this type of loan is a kind of ‘no credit check loan’ businesses can use.
How Can You Obtain An ABN Loan
Applying for ABN loans for small business owners involves a series of processes that your company needs to follow through. They include the following:
- Look For A Lender That Hands Out An ABN Loan
To begin your journey, you need to look for lending institutions that give out ABN loans.
Do a quick online search and review different lenders’ websites to look into their ABN loan offerings. Nonetheless, it’s highly recommended that you don’t go for the first lender that you see on the web. Look around to explore your options. Additionally, you can ask fellow business owners for referrals – inquire about ABN loan providers they’ve worked with in the past and their experience with them.
Prepare a list of top ABN lenders that you’re able to locate. Then, check each one’s reputation, legal and financial compliance status, financial size, and so on. Aim to have at least three top lenders with outstanding credentials that you’re willing to partner with.
- Book A Preliminary Call With Your Prospective Lenders
Now that you have your top three ABN lenders, the next step that you need to take is to reach out to each one to learn more about their products and services.
Usually, lenders offer their phone numbers to which prospective customers can reach out for a quick meeting over the phone. If you want to meet a lender face-to-face, you can book a personal meeting with a bank representative in their office.
Either way, make sure that you prepare a list of questions that you can ask your lender prior to hopping on a meeting. Inquire about their experiences handling ABN loan applicants, their loan approval and rejection rates, current business loan rates, and many more. These pieces of information are very helpful for you to determine the both of you can be a great fit to work together in meeting your business’ financial goals.
After going through your top three lenders, you’re now faced with the difficult decision of choosing which one you’ll move forward with. Although you’ve already done your due diligence, this time around, it’s best that you trust your guts. Ask yourself, which one made you feel welcome with your queries?
- Prepare The Needed Loan Requirements
After picking which lender you’ll want to work with, you’ll need to book a more thorough call with them. This is to learn more about their loan application and approval process. During the meeting, ask for a checklist of the requirements you need to gather and send it to them in order to be processed for approval.
ABN loan requirements differ depending on the loan provider. Nonetheless, they usually include the following: an active registered ABN, proof of identification, and the like. Your ABN loan provider may ask you to send over additional requirements – make sure that you include them to increase your chances of getting your loan application approved.
- Wait, Wait, Wait
After passing your requirements, the waiting begins. It can be painstaking, but you need to have patience. Keep in mind that you’ve already done your part; now, you need to let your lender do their part.
Be sure to ask your partner lender for the approximate timeline of your loan processing. It wouldn’t hurt to check back to them from time to time yet don’t flood their phone with a lot of calls.
During the long waiting, make sure that you keep your lines open for a call from your lender. They may give you a call to ask for additional requirements in order to proceed with the loan processing. Be sure to adhere to added requests to ensure the process to be hassle-free.
- Negotiate Your Loan Terms
After receiving the call from your lender that your loan has been approved, you may now release a sigh of relief. Nonetheless, did you know that not all is said and done yet until you’ve signed all the loan-related paperwork? This gives you room to negotiate for a much better loan term such as a lowered interest, longer duration, and the like.
Open the conversation with your lender. Try to make your case via a consultation. Present your business financial reports and the like to strengthen your arguments for a much better loan.
- Sign All Finishing Paperwork
If your lucky and are able to close in on a lower interest loan, now all you have to do is to sign the paperwork presented to you by your lender. After completing all the final paperwork, you’ll now have to wait to receive your check, or the funds be deposited to the business account you’ve designated in your application.
If you have further questions concerning your ABN loan application process, don’t hesitate to reach out to your lender.
Pros And Cons Of ABN Loans
Just like any other financial instrument, ABN loans come with their own advantages and disadvantages. As a business, you need to keep them in mind before availing yourself of a loan for your business needs. Keep on reading below to learn more
- Advantages Of ABN Loans
The following are said to be some of the perks of ABN loans compared to other lending options for businesses:
- ABN loans are usually catered to small businesses and startups. Hence, they’re readily available to many starting entrepreneurs like you.
- Most loan providers offer flexibility to loan applicants.
- ABN loans can be utilized for a variety of business purposes.
- Applying for an ABN loan doesn’t affect your business’ credit standing.
- Disadvantages Of ABN Loans
The following are said to be some of the drawbacks of ABN loans compared to other lending options for businesses:
- Availing of a business loan while your company is just starting can be a considerable financial risk.
- Loan payments can negatively affect a startup’s cashflow.
- ABN loan providers can impose restrictions to their loan approvals.
As part of due diligence, make sure that you weigh each pro and con before pushing through with the ABN loan application.
In Conclusion
In conclusion, ABN loans can be a valuable financing option for budding company owners like you. With flexible eligibility requirements and terms tailored to small businesses, these loans can provide the funding you need to fuel your organization’s growth and succeed in achieving its goals. As a golden rule, make sure that you conduct your research and compare rates from various lending institutions before applying for an ABN loan.