What is an ABN loan? Where and how can you get one? These and many more questions will be answered in this article.
Filling out mountains of paperwork and digging up old income statements for a credit check can feel like an insurmountable obstacle when you need business loan quickly.
This is especially true if your business is just beginning to expand and you do not yet have a credit score, or if you are a sole proprietor without a traditional income. Perhaps you are too preoccupied to meet the bank’s stringent loan requirements.
Many Australians are unaware that an ABN is all that is required to access business loan! ABN Loans, also known as low-doc loans, are an excellent way to inject capital into your new business quickly and with minimal hassle.
If you are self-employed or the owner of a business, you almost certainly have an ABN. However, were you aware that you may apply for an ABN loan? Afraid it won’t be approved due to your low credit score? We have excellent news for you.
What is an ABN?
The Australian Business Number (ABN) is an 11-digit identity that is provided by the Australian Business Register (ABR), which is managed by the Australian Taxation Office (ATO).
The ABN was introduced by the Liberal government of John Howard on 1 July 2000 as part of a substantial tax overhaul.
The goal of an ABN is to act as a means of public identification. This enhances openness and can facilitate some business operations, such as invoicing, distinguishing your company from others. However, your ABN can also be used to evaluate you and can affect financial application choices.
Lenders evaluate your ABN to determine your creditworthiness, financial standing, business existence, and whether you can be relied upon to repay a loan. Therefore, approval for an ABN loan is contingent on whether or not you have a solid financial background.
Each entity conducting business in Australia is required by law to have an ABN, which must appear on all tax invoices and other tax-related papers issued by the entity.
What is a same day ABN loan?
Same-day ABN loans are loans in which the lender deposits the borrowed monies into your business bank account on the same day you apply, assuming you have a valid ABN.
If you are a business owner seeking same-day funding, you must verify that your chosen business lender offers this service. Most lenders will take between 24 and 72 hours (or longer) to offer funds since they must evaluate your loan application and credit history.
Same-day ABN loan providers feature a streamlined online application process, quick approval times, and the ability to expeditiously transfer funds to the business’ bank account.
To ensure that you receive the funds on the same day, it is helpful to be sure to check with the lender when you may anticipate receiving the funds.
For instance, some lenders claim “loan within 24 hours,” which might be the same day or the next. For these lenders, applying early in the business day or requesting that the lender outline the funding process is advantageous.
How much is your credit limit?
The amount you can borrow under an ABN loan will vary from lender to lender, as well as based on your personal circumstances. The typical range for truly easy ABN loans that do not involve a credit check is between $1,000 and $15,000.
The SME Recovery Loan Scheme has also increased the prevalence of larger loans ($50-$500,000) However, you will likely be required to produce significantly more evidence that you can truly repay the loan.
It will likely be comparable to the amount of effort required to acquire more conventional business funding.
Best Abn Loan Lenders
The followings are some of the top ABN loan lenders in Australia.
To expedite loan approvals, OnDeck’s ‘Lightning loans’ use a proprietary algorithm called ‘KOALA’ (key online Australian loan algorithm).
Unique to this KOALA system is that 65 percent of applications can be evaluated automatically and do not require the participation of underwriters.
With at least six months’ worth of bank statements and an application for a company term loan of less than $100,000, OnDeck can render a loan decision within 90 minutes.
OnDeck is one of the most expedient lenders for same-day loans, as funding is available within two hours of application. For loans over $100,000, the funds will be available in one business day.
Ondeck provides business loans between $10,000 and $250,000 for terms between 6 and 24 months. These loans are unsecured; all that is required is a personal guarantee.
To qualify for a loan with OnDeck, you must have an annual gross revenue of at least $100,000 and at least one year of business history.
In addition, your company must not have declared bankruptcy in the past and must have a credit score above 500.
Ondeck provides SMART BoxTM without any hidden expenses. Your only expense is a 3% origination charge.
2. ALC Commercial
ALC Commercial offers ABN loans without a credit check! This implies you can apply for loans with zero effect on your credit report.
They are aware of how quick it to fall into poor credit. Whether it’s a few missed payments or an excessive number of credit inquiries, many of us have been there.
If you require self-employed loans with no credit check, a poor credit score should not prevent you from obtaining a loan. This is why an ABN loan can be obtained without a credit check! It’s as simple as that.
As a reputable private lender, ALC Commercial tailors ABN loan solutions to your needs. With over 30 years of specialised knowledge, they are nimble and versatile, allowing them to offer ABN loans without a credit check.
You can obtain a small business loan with bad credit if you choose the appropriate lender.
Capify gives you the option between a conventional business loan and a merchant cash advance. The difference between the two is that a merchant cash advance is repaid via daily direct debit using a percentage of your future daily EFTPOS, debit card, and credit card sales.
To qualify for either product in rapid time, your firm must have been in operation for at least 12 months with a minimum monthly revenue of $10,000 or for at least 6 months with a minimum monthly revenue of $20,000 These conditions are subject to any documentation requirements.
Loans under $75,000 do not require financial statements, tax returns, or BAS, whereas for larger loans, you should be prepared with financial statements.
Your business must also pass the lender’s standard credit evaluation.
The loan terms for both products range from 3 to 12 months and feature a predetermined payback amount as opposed to interest rates.
This means that you will pay the same amount each daily payment cycle for a term loan. This helps you to avoid making substantial monthly payments.
Bizcap is a prime candidate for same-day funding due to the fact that funding is disbursed within 3 business hours of an online application. According to Bizcap, this makes them the quickest lender for Australian firms on the market.
As a direct lender, Bizcap is in a position to make loans quickly. Because they are self-funded, they do not have the same bureaucracy as other lenders, such as the necessity for financial paperwork.
As a low-documentation lender, they require only basic bank statements and a few additional papers prior to loan approval. This makes it not only simple for your firm to apply, but also for Bizcap to promptly approve loans.
Bizcap markets itself as Australia’s most accommodating lender, and thus has a high approval rate for those who match the lender’s eligibility requirements.
There are both secured and unsecured business loans available. These are small business loans ranging from $5,000 to $1,000,000 with a 3- to 12-month repayment duration. Payments are made on a daily or weekly basis via direct debit.
To be eligible for a loan from Bizcap, your business must have at least six months of trade history, $10,000 in monthly income, and a current ABN.
If you require quick money in the form of a lump amount, Prospa offers small business loans ranging from $5,000 to $300,000 with periods between 3 and 36 months. You can select between daily and weekly repayments with Prospa.
Unique to Prospa is the possibility for 4 weeks without payment. This feature allows you to delay your first payment for up to four weeks, giving you more flexibility if money is tight.
If you prefer to borrow on an as-needed basis, a line of credit is a choice. With Prospa, you can borrow between $2,000 and $150,000 on a 24-month period that is renewable.
This option is advantageous because you only pay interest on the funds you really make use of.
It is advantageous to borrow less than $150,000 because no collateral or financials are required for these loans.
The online application process takes less than 10 minutes, and approval is expedited if you provide Prospa with secure electronic access to your bank statements.
To qualify for a loan, you must show that your company has been operating for at least six months and has a monthly revenue of at least $6,000.
Moula is one of the top lenders with no hidden costs and transparent pricing. In contrast to other lenders on this list, they advertise interest rates between 14.95 and 34.95 percent annual percentage rate (APR).
The loan amount ranges from $5,000 to $250,000 with a repayment term of 12 to 24 months. To qualify with Moula, your business must have been operating for at least six months and have a minimum monthly turnover of $5,000. If your firm makes more than $75,000 annually, you must additionally register for GST.
Moula approval and funding might take up to 24 hours, thus it is crucial that you take additional measures to accelerate the funding procedure.
1. Submit an application online (which takes only 7 minutes)
2. Link your finance data (e.g. a bank account, Xero, MYOB)
3. Allow Moula to conduct a credit check
4. Ensure you add a request to accelerate loan
Steps 2 and 3 must be completed because the Moula platform relies on automation for quick approval. It is advisable to apply in the morning and follow up with a phone call so Moula is aware to expedite the process.
Lumi offers same-day funding for both lines of credit and short-term business loans, should you wish to pick between the two. The evaluation of an application takes two hours, and funding is possible on the same day.
Online applications take less than 10 minutes, and loans under $250,000 have minimal documentation requirements, making loan applications even quicker.
To expedite your application, you should have your ABN or ACN, driver’s licence, and company bank account information readily available.
Lumi also allows you to connect online accounting applications like Xero or Reckon for even quicker approval.
Both loans and lines of credit for businesses can range from $5,000 and $5,000,000. The maximum loan period for business loans is 36 months, and interest rates begin at 17.95%.
Each withdrawal from a credit line is subject to a 12-month repayment period, which can be extended by an additional year if necessary.
To qualify for a loan with Lumi, your business must have been operating for at least six months and generate at least $5,000 per month in revenue.
If your loan amount is less than $300,000, collateral is typically not required.
8. Unsecured Finance Australia
Unsecured Finance Australia specialises in unsecured company loans of up to $100,000. The lender prioritises a completely online loan application and funding procedure.
If you submit your application before 4 p.m. on a work day, it is possible for your loan to be authorised and funded on the same day.
Unsecured business loans can range from $5,000 to $300,000, with repayment durations between 3 and 24 months and opportunities for top-up and early payoff.
The application process takes about five minutes, and loans under $50,000 require only minimum documentation.
To qualify for a loan, your firm must have been in operation for at least six months (in exceptional cases, this requirement might be lowered to three months) and earn at least $60,000 in annual revenue. Additionally, you will need an online bank account and an ABN.
The payment terms for unsecured business loans range from 3 to 24 months and include options for top-up and early repayment.
In addition to lump sum term loans, a line of credit with a $500,000 revolving ceiling and asset finance (equipment, car) up to $300,000 with a 60-month term are also available.
Before taking ABN loan
Because low-doc ABN loans are so simple to secure, it can be tempting to rush in before you’re prepared, especially if you need money for your business quickly. However, incurring debt can later translate to an overburden on your business, especially, when it’s time to make repayment.
Therefore, it is always prudent to seek sound advice beforehand.
Here are answers to some frequently asked questions relating to ABN loans:
In addition to abn, what are other requirements?
Clearly, there are still certain requirements to secure an ABN loan. For instance, the majority of lenders will require you to have an ABN for at least two years.
Some lenders will still give you a loan if your ABN is more recent than that, but you can expect to pay much higher interest rates.
You may also be required to provide proof of income, but the amount will be significantly less than what other, more conventional loans require.
This is what makes ABN loans such an excellent alternative for firms without much of a paper trail, or for those of us who simply lack the time, to obtain company funding.
What can ABN Loans be used for?
What can an ABN loan be used for? Well, this also depends on your lender, as their terms will vary slightly.
Some will provide loan for virtually any business-related expenditure! However, most ABN Loans have more specific terms. Typically, it is limited to the purchase of work-related equipment or vehicles.
What should I do if I have poor credit or a low credit score?
You should check with the lender before applying for a same-day loan if you have poor credit or a low credit score.
While many lenders will only lend to businesses with excellent creditworthiness, some lenders will also evaluate other factors.
For instance, some lenders would extend credit if your organisation has a stable cash flow and balance sheet.
The following factors can help you obtain a same-day loan despite poor credit:
Choose a company that advertises loan to firms with weak credit ratings.
Ensure the company’s financial health, cash flow (as evidenced by bank statements), and a solid balance sheet.
Have some security to back the loan
Apply for a no-credit-check or no-document loan.
Request a smaller loan amount.
Expect higher interest rates regardless of how you obtain a loan with poor credit, as the lender is taking on a greater risk.