With the Australian Bureau of Statistics (ABS) reporting a 7 percent increase in the number of businesses in 2021-22, there will always be startups looking for funding. So what are some common reasons Strive Financial lends to new Australian businesses?

Funding for initial operations

A startup often needs finance for initial expenses such as equipment, inventory, marketing, and rent, as well as wages for employees.

New technology investment

To be competitive, a startup is going to need to invest in new technology, such as hardware, software and cyber security. A business loan can provide the funds needed to make these critical investments.

Emergency expenses

Ideally, every small business should have a healthy contingency fund as unexpected expenses can pop up at any time. It may be a broken piece of equipment, unexpected repairs or inflation impacting your calculations.

Expansion and growth

As your startup grows, you may need to invest in more – or better, bigger or heavier -equipment, especially if your business takes off. And a medium-term business loan can be put to good use buying more inventory, scaling up your marketing or bringing on more people to cope with the business growth. Now, if you’re really shifting up a few gears and expanding to a new or second location, a long-term loan might be just what your business needs.

Cashflow

It doesn’t matter if you’re the newest kid on the block or an experienced old-timer, if you haven’t got your cash flow sorted, you may be headed for trouble. Cashflow is the lifeblood of any business and, as any small business owner can tell you, it takes just the smallest of hiccups somewhere along your supply chain for a cashflow bottleneck to develop. Which is bad news for you, your suppliers and most importantly, your customers. So jump on it quickly to keep your new business thriving.

Seasonal fluctuations

Depending on your business, you may experience fluctuations in demand for your products or services during the year. A business loan can help bridge the gap during quiet periods, ensuring your business has the cash flow needed to stay in operation.

Why is borrowing from traditional lenders so tricky for startups?

A startup asking for finance from traditional banks may be challenging, due in part to startups typically having limited or no financial history as a business. This makes it hard for banks to assess their creditworthiness. With 167,646 new businesses opening in 2021-22, it stands to reason that a significant number will need finance of some kind. Many will seek alternative sources of finance, such as Strive Financial, because alternative lenders are more willing to lend to startups and small businesses that may not meet traditional lending criteria.

Whatever your reasons for needing a business loan, it’s important to chat with the specialists. If you’re not sure what you need or for how long, start by playing with some numbers in our handy online loan calculator. Then give us a call or shoot us an email and you could be looking at your new business loans funds sitting in your bank account in less than 48 hours.