What Is an Unsecured Business Loan and Do I Qualify?

Find out what an unsecured business loan is and which solution would best suit your needs.

What Is an Unsecured Business Loan?

An unsecured business loan is a type of financing that does not require collateral, like your home or car, to secure the borrowed funds. That makes them an appealing choice for businesses that don't have valuable assets, or don't want to risk losing their assets if they become unable to repay their debt.

When assessing a small business' creditworthiness for an unsecured business loan, lenders will consider its cash flow and financial health. Lenders then determine the ideal terms of the loan - the fees and charges, duration of the loan, and frequency of loan repayments - based on the individual needs and financial capabilities of your business.

While the advantage of an unsecured business loan is that they don't require assets as collateral, the disadvantage is that they come with higher interest rates and shorter repayment terms than secured business loans. This is because the lack of collateral presents a higher risk for lenders. Nevertheless, unsecured business loans remain a popular choice for businesses seeking quick access to funds without tying up their assets.
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What Can You Use Unsecured Business Loans For?

Unsecured business loans are a financing option for businesses that require funds without having to provide collateral. Some of the common uses of unsecured business loans include:
Expansions,
Renovations
and Repairs
Unsecured business loans can be used for purchasing inventory or new equipment, allowing your business to become more competitive and better meet the needs of its customers.
Marketing
Unsecured business loans can finance advertising, digital marketing or trade shows. The goal is to raise brand awareness and gain new customers.
Hiring
Employees
The funds can also be used to hire more staff, allowing your business to take on new projects or expand its services.
Business
Expenses
Unsecured business loans can be used to cover costs like rent, utilities and insurance, ensuring your business runs smoothly without interruptions.
Cash Flow
Unsecured business loans can help businesses keep a steady cash flow when their income or expenses change unexpectedly.

What is the Average Approval Time for Unsecured Business Loans?

The average approval time for unsecured business loans varies among lenders. While some online lenders offer quick approvals within a few days, traditional banks may take weeks. Factors influencing approval time include the completeness of your application, the lender's review process, and the overall efficiency of their loan approval system.

How Can I Get the Best Terms on an Unsecured Business Loan?

Here are three things you can work towards to improve your chances of obtaining an unsecured business loan:

  1. Maintain a good credit history.
  2. Demonstrate consistent revenue growth.
  3. Have a well-developed and solid business plan.

Additionally, building a relationship with a trusted financial partner can enhance your chances of obtaining favorable loan terms.

Does Bizcap Offer Unsecured Business Loans?

Bizcap offers business loans up to $30,000, without requiring up-front security for Fast Business Loans and Small Business Loans. However, Bizcap does require a personal guarantee from the director, shareholder or other people involved in the business for all loans.

For any loans that go into default and for all loans above $30,000, Bizcap will take a charge over property. This will give Bizcap the right to register their interest on the PPSR or to lodge a caveat on the property.

Compare the various business loans Bizcap offers here.

How Much Can I Borrow From Bizcap?

At Bizcap, we offer a range of loans to accommodate the diverse financial needs of businesses. Our small business loans range from $5,000 to $2,000,000 and can be approved in as little as 3 hours.

The amount Bizcap lends will depend on the specific circumstances of your business. We carefully consider a variety of factors to determine its health and creditworthiness before lending accordingly. Various factors influence the amount of money you should borrow, including your business's cash flow, the duration of its operations, its assets and the reason for needing the loan.

Bizcap loan terms range from 3 to 12 months, and repayments can be made daily or weekly, providing borrowers flexibility and convenience.

Our goal is to provide tailored loans for businesses to address their specific financial needs. By doing so, we aim to minimize risk for both the lender and the borrower. We can assess your business's financial health to find the right loan amount and terms for its growth and success.

To find out what kind of loan Bizcap can tailor to your business' needs, enquire now.

How Do I Qualify for a Bizcap Business Loan?

You may qualify for most Bizcap loans if your business meets the following criteria:

  1. It is registered with an active New Zealand Business Number (NZBN). This demonstrates that your business is operating legally in New Zealand.
  2. It has been trading for at least 4 months. We need to check if your business is stable and has potential for growth before issuing a loan.
  3. Have at least $12,000 in monthly revenue. This criterion helps us determine your business’ ability to manage and repay the loan.

When reviewing your application, we will examine your financial history, cash flow and business performance. Unlike other lenders, we don’t check your credit score at the point of application. That happens later, once we’ve made you a conditional offer that you’d like to accept. The more robust your business’s finances are and the greater your business' potential for success, the higher your chances of qualifying for a Bizcap loan.

Contact Us

Need help? Got questions? Contact us on 0800 249 227 for assistance with your Bizcap loan application or to gain more knowledge about the solutions we can offer your business to help it grow.

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