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The minimum amount on a business loan


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The lending criteria for business loans can be confusing. Different lenders have different criteria’s, and along with that, comes different lending amounts. There isn’t one set amount that lenders have to abide by, and so generally, the amount can be at their discretion. However, there are some common factors when it comes to the lending amounts of business loans. If you’d like to find out just how much you can get with a business loan, or what the minimum amount is that you can borrow, read on below.

What Is A Business Loan?

Business loans are capital offered by lenders to businesses. A business loan is specifically intended to help you to grow your business. Like all other loans, it involves the lending of funds which you then repay back to your lender with added interest.

A business loan comes in handy if you don’t have the extra funds to build your business yourself. Business loans also come with either a fixed or variable interest rate and can be either secured or unsecured loans.

Business loans can be used for most aspects of a business. Generally, you can use it to purchase a business, improve your cash flow, expand your business, or pay off any debts. Depending on your lender, short and long term financing may also be an option for you.

Is There A Minimum Amount On A Business Loan?

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Generally, most lenders will lend a minimum of $5,000 for a business loan. Some lenders may have a variation on this figure, and some with lend a minimum of $10,000. It’s best to check with your lender before applying, as they may have different conditions on the lowest figure that they will lend out.

Is There A Maximum Amount On A Business Loan?

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There’s no blanket amount that lenders are allowed to offer their borrowers in terms of a business loan. Usually, the amount offered is determined by the size of the business if it’s existing, profit margins and its history. Generally, the more secure and profitable your business seems, the more money you will be able to borrow. Depending on these conditions, you may be able to borrow anywhere from $250,000 to $50,000,000 with a business loan. Depending on the lender, it may be possible to borrow upwards of $50,000,000. However, this may come with very strict lending criteria.

What Do I Need For A Business Loan?

Unlike regular personal loans, lenders will often require more documentation for a business loan application. You may need to have the following documents in order to apply for your loan:

• Personal identification such as a driver’s licence
• Business verification. You will need to be able to prove your ownership of the business.
• Financial history. Your lender will almost always want to see how strong both your personal and business finances are. They may need to see bank statements, sales records, and other financial documentation before they approve your loan.

If you have a new business and have been trading for less than 12 months, your lender may need you to provide some cash flow projections, a business plan and a lease agreement in order for you to prove that your business is viable.

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The Different Types Of Business Loans

• Business overdraft loan:
This type of loan allows you to overdraw funds in your transaction account. Interest is then charged on the amount overdrawn, which continues until the loan is paid off in full. You may also have to pay extra fees and charges.
• Line of credit:
As opposed to a loan, a line of credit is not one singular lump sum payment. Rather, it is an agreed-upon amount of credit from your lender that you can withdraw as you need it. You only need to pay interest on the amount you use, instead of paying interest on the total sum.
• Secured loan:
A secured business loan requires you to use an asset that you have, such as property or existing business as collateral against the loan. While this usually allows you to borrow more money at a lower interest rate, the lender can sell your asset to cover any debt if you are unable to make your repayments on time.
• Unsecured loan:
With this type of loan, you are not required to put up any collateral as with a secured loan. However, this means that you could find yourself facing a higher interest rate because of the lack of security, or a smaller loan amount.
• Fixed-rate loan:
Similar to other types of loans, a business loan can come with either a fixed or variable interest rate. A fixed-rate is set by your lender for a period of time, usually between one and five years.
• Variable rate loan:
In a variable rate loan, the interest can be changed month by month at the discretion of your lender.

Where Does Tiger Finance Come In?

With Tiger Finance, we can help to get you a loan in four easy steps. You will have a free consultation with one of our specialists, and we will tailor-make you a loan. We will negotiate with lenders on your behalf before you are approved.

We have helped countless Australians with both good and bad credit ratings get funding for their business. We understand that lending criteria from other lenders are too strict, and can stop you from achieving your goals. That is wrong, and it should not hold you back.

How We Can Help

Our finance specialists can help you find the right business loan for your project. Business loans are a complicated topic, but we will find a loan that makes your dream project that much easier.

If you are one of the many Australians finding getting a business loan difficult, Tiger Finance can make the process simple and pain-free.

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