What is a small business loan?
Small business loans come in different shapes and sizes and serve different purposes. Whether you are a new business owner, looking to expand your business or need some help with your cash flow, there is a business loan suitable for you. Small business loans can either be secured or unsecured.
A secured loan is a loan that is guaranteed by an asset, such as a property or a car. On the other hand, unsecured loans do not require any security, hence, interest rates on unsecured loans are typically higher than that of a secured loan.
Small business loans can be beneficial for your business in several situations including:
Does your business qualify?
$100,000 gross annual turnover
1 year in business
(prior or recent)
500 business credit score required
Minimum 3 monthly deposits
Find out how much funding you could get for your business
How much can I borrow with a small business loan?
OnDeck small business loans range from a minimum of $10,000 to a maximum of $250,000. The amount you can borrow will depend on how much you are able to pay back in weekly or daily instalments as a business.
You can use our business loan calculator below to estimate how much you would be required to pay in weekly instalments based on your desired loan amount and loan term.
How It Works
So, you have decided that a small business loan is the right choice for you and your business - but what next? Follow our step by step guide:
Step 1. Small Business Loan Application
You will first need to fill out a small business loans application. The application should take no longer than 10 minutes and is in four parts: Create a login, About Your Business, About You, and Bank Statements. To streamline your application process, make sure to have your required documentation on hand and ready to submit. You will need your personal bank statements, business financial statements, and identity documents (Drivers Licence or Passport). You may also need to provide details of your personal financial circumstances, i.e. assets, debts, income, expenses. Start your application here.
Step 2. Application Processing Time
Once your application has been submitted, our team will then verify your documents and review your business credit score and application. Approval can be as fast as 1 business day with the funds in your account that same day.
Step 3. Receiving Funds
Once approved, the funds will be deposited into your given bank account.
Step 4. Repayments
Our small business loan minimum term is 6 months, and our maximum loan term is 24 months. OnDeck offers flexible repayment options, including weekly and daily automatic payment options. Your repayment amount depends on your agreed loan amount and loan term. See a rough estimation of repayments with our business loan calculator.
Your next small business loan - 3 easy steps, no obligations
What you can do with a small business loan
Expanding Your Business
Chris owns a local Chinese restaurant in a suburban town that has been booming for well over a year now. Bookings for lunch time and dinner are generally encouraged as walk-ins may not be guaranteed a table or may need to wait some time before customers are able to be seated. Chris is having no troubles employing new staff; however, the space capacity of his restaurant is not enough to meet the new demand in customers.
The store next-door to Chris’ restaurant, a boutique women’s fashion store, has just shut its doors and the space is now available for lease. Chris thinks this would be a great opportunity for him to expand his restaurant business and pull in more customers. A small business loan could help him with his leasing costs, new equipment, and staff payments.
Seasonal Changes and Unforeseen Circumstances
Seasonal businesses often find it difficult to generate stable revenue across the year. Seasonal small businesses such as swimwear companies, vacation resorts and snow gear companies will find that small business loans can significantly help during the off-season periods. A seasonal business loan, such as a short-term loan, can help these business owners manage cash flow through their low sales months.
At other times, unforeseen circumstances may arise that can be detrimental to small businesses. Josh runs a busy café in the business district in Melbourne CBD. Business was going well until recently when COVID-19 forced communities into lockdown and businesses to temporarily shut its doors. Josh’s café has been temporarily closed for the past 4 months and as a result, his cash flow is running dry. Josh has enough money to stay closed for a few more months but may need assistance with his funding when he opens his doors again to pay staff and purchase supplies. He can take out a small business loan to help him get back on track once his business reopens.
Upgrading Equipment and Business Technology
With new business technology being introduced each year, it can be hard for businesses to stay modern and keep up to date with the latest gadgets. Mary owns a beauty salon in the CBD that has been established for 4 years. When Mary first opened, her business model was unique and thus had an abundance of customers. Since then, similar beauty salons and studios have opened in the vicinity and although Mary has had enough loyal customers to keep her in business, she’s not generating a high enough profit to keep her in business over the next few years.
There have been several beauty technology developments in the recent years that have made competitors a better alternative for customers. Mary has realised that she needs to upgrade her salon equipment, including her massage beds and salon chairs, to draw in more customers and improve the customer experience for her customers. To do this, Mary can take out an equipment financing loan.
Different Types of Small Businesses
Finance and Marketing
Businesses such as small accounting firms, tax companies or market research companies can benefit from a small business loan to:
• Upgrade or purchase powerful automation tools
• Upgrade or purchase office equipment such as printers, tables, chairs, storage cabinets
• Renovate or expand office space
Businesses such as construction/trade work, landscaping companies or house cleaning services can benefit from a small business loan to:
• Upgrade or purchase equipment such as construction machinery, cleaning supplies, or other heavy equipment required for trade jobs
• Pay contractors
IT and Digital
Businesses such as web development companies, SEO consultancies or podcast providers can benefit from a small business loan to:
• Purchase development programs or other business tools and software
• Upgrade or purchase equipment such as podcast microphones, laptops, and other hardware
Businesses such as boutique clothing stores, homeware stores and gift shops can benefit from a small business loan to:
- • Purchase supplies in bulk as suppliers usually provide discounts for bulk buys
- • Renovate or expand the store front
- • Pay employee wages
Food and Hospitality
• Upgrade or purchase store equipment such as coffee machines, commercial kitchen equipment and POS systems
• Renovate or expand business front
• Pay employee wages
Businesses such as dog grooming, personal training or hair salons can benefit from a small business loan to:
• Purchase supplies or equipment in bulk such as gym equipment, pet supplies or salon chairs
• Pay employee wages
• Cover costs for transportation if the business is mobile
Business Plan - Do You Have One?
As an unsecured small business loan lender, OnDeck does not require a business plan when applying for a business loan. However, it is always a good idea to have a well planned business plan so that you can see your sales forecasts and cost estimates.
Every business is unique and so your business plan should also be unique and aligned with your business areas of focus. There are many business plan templates available, although, it is highly recommended you find one that suits the scale and nature of your business.
Generally, a business plan should include:
- Executive Summary
- Details about your business including trading name, ownership details and key dates
- Describing your products and/or services
- Employment Details including key staff and management structure
- Your target market and your customers – include market research findings if you have conducted any
- Competitor Research – how they are promoting and performing and comparisons
- Your finances including any fixed costs and planned costs – including statements such as cash flow, profits and loss and balance sheet.
- Your vision and future for the business – vision and mission statements, business goals and objectives