Everything You Need to Know About Startup Loans

Startup loans – the info you need to read! 

So, you’re looking to start a new business? Maybe you need some spare cash to fund a new entrepreneurial venture? Whatever it is you’d like to fund, a startup loan could be the cash you’re looking for. There are a variety of different lenders on the market that could offer you the perfect startup loans. At Personal Loan Pal, we’ve done the research for you. So, here’s what you need to know before applying for a startup loan. 

What is a startup loan? 

Traditionally, a startup loan was used to provide a new business with enough capital to get them off the ground. These days a startup loan can be used to cover a wide variety of different expenses that could include startup business loans, student startup loan, small business startup loans or even bad credit business loans for startups. Technically, it is up to the lender to approve what expenses a startup loan can be used to cover. 

Who provides startup loans? 

So, now you know a little more about what a startup loan is, we bet you’re wondering who provides them? There are a number of different credit providers that approve startup loans. Here are just a few:

  • Banks;
  • Credit unions;
  • Online lenders;
  • Micro-lenders. 

What type of startup loan could I apply for?

As we mentioned, there is a whole range of different startup loans on the market. The trick is finding the perfect lender. Want to know more? Here’s just a couple of startup loans you could apply for.  

Startup business loans

If you’ve been googling ‘small business startup loans Australia’, ‘new business loans’, ‘best place to get a business startup loan’ or ‘short term loans for startup business’ then we recommend you do your research. There are a wide variety of different credit providers that could approve you for a startup business loan. It is important to make sure you do your research. More often than not, online lenders could provide competitive rates on startup business loans when compared with traditional lenders. It is important to make sure, however, that you select a lender that complies with the Australian Code of Responsible Lending. So, if you’re looking for the best way to get a business startup loan, we recommend you do some shopping around.

Student startup loans 

The Australian Government provides recipients of Youth Allowance with the opportunity to apply for a student startup loan. This is a government-backed line of credit that provides individuals receiving Youth Allowance, Austudy or ABSTUDY living allowance with access to a $1,094 loan. Eligible applicants are eligible for a student startup loan 2 times a year. Student startup loans are tax-free and you won’t need to declare them to use as income for your regular student payments. Students are required to repay the loan once they start earning a certain amount of income.

Small business startup loans for bad credit

Want to apply for a small business startup loan but worried that credit could stand in your way? You’ll be pleased to know that there are lenders out there who could provide startup loans for people with poor credit scores. Some lenders are able to look at your current financial situation instead of focusing on the past. It’s just about shopping around. If you haven’t had much luck with traditional lenders, online credit providers could be a good place to start. It is important to make sure, however, that you select a reputable lender. Make sure they comply with the Australian Code of Responsible Lending before you enter into an agreement.

Secured vs. unsecured startup loans

Wondering what the difference between a secured and unsecured business loan is? It’s simple. A secured startup loan requires the borrower to attach collateral as security against a loan. Why might a borrower need to attach collateral against a loan? A secured loan is usually for a larger amount of cash and that means it is a bigger risk to the lender. Collateral provides the lender with a form of ‘insurance’. If the loan is not repaid over the agreed-upon period of time, the lender could be entitled to take ownership of the collateral. This, however, is usually just a last resort. An unsecured loan is essentially just a loan that does not require collateral as security. Unsecured business loans for a startup are usually for smaller amounts of cash and are, therefore, less or a risk to the lender.  

What are the interest rates on startup loans? 

Have you been googling ‘low-interest small business startup loans’? Keep in mind that every lender is different and, therefore, every lender has different interest rates. These rates could vary depending on the amount of cash that you borrow and the repayment period. An individual’s credit score could also have a bearing on the interest rate of the loan. We recommend shopping around for the best possible interest rate before signing an agreement with a lender. 

Personal Loan Pal – who are we?

Personal Loan Pal is your local Aussie lender-finder. What is a lender-finder? Glad you asked! Basically, we do the searching for you. When you apply with Personal Loan Pal, we’ll show your application to a wide range of different lenders and present you with the results. You then get to choose your lender. Our team are committed to providing Aussies with all their options. We want to find a lender that is right for you. 

Personal Loan Pal is dedicated to taking the hard work out of finding a reliable lender. We understand that you don’t have time to waste scrolling through pages and pages of google search results. So, why not let us do it for you! No paperwork – just simple, stress-free personal loans

Can I get a startup loan from Personal Loan Pal? 

At Personal Loan Pal, it’s all in the name. Our team finds personal loans. Unfortunately, we do not match borrowers with business startup loans. Don’t stress though, our team could still have the cash you need for other expenses. If you’re unsure as to whether or not you could be approved for a personal loan we encourage you to submit an application. The good news is, we don’t charge when you apply. If our team are unable to match you with a compatible lender, we won’t ask you to pay a cent. That means you can apply with Personal Loan Pal at no financial risk. Sound good? What are you waiting for? 

Who can apply?

We need our applicants to meet a few basic criteria before they submit an application. Don’t worry, it’s nothing too complicated. If you can tick off the following, you could scroll up and start an application right now. Here’s what you’ll need to meet: 

  • You must have an active mobile number and email address; 
  • Applicants must be over the age of 18;  
  • A regular income must have been deposited into your own personal bank account for the last three months; 
  • Applicants must have internet banking set up; 
  • You must be able to prove you are an Australian citizen or permanent resident.

What will I need to submit with my application? 

We keep it pretty straight forward at Personal Loan Pal, however, a potential lender will need a few important pieces of information. Here’s what our team might ask you to provide: 

  • Personal info (name, D.OB etc.);
  • Your internet banking details; 
  • All applicants will need to provide the reason you are applying for a loan; 
  • Your MyGov details (if you receive Centrelink benefits);
  • Your employment details and employer contact info; 
  • All applicants must be able to prove they are Australian citizens or permanent residents. 

If you’ve got questions regarding any of the above don’t hesitate to get in touch with our friendly team. We’re here to make your life easier!

How does it work? 

Simple, straight forward and stress-free – that’s Personal Loan Pal. Ready to find your perfect personal loan? Here’s how it works. 

Choose your loan amount 

Head to our home page and use the loan calculator to select the amount of cash you would like to borrow and the amount of time you think you’ll need to pay it back. 

Choose your lender 

We’ll show you a list of compatible lenders and all you need to do is choose one!

Cash to your bank 

Once you’ve signed an agreement with your new lender the cash will be on its way to your account!