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$20,000 business loans
You can claim tax benefits for vehicles, tools, furniture, office items, and mechanical and electronic equipment.
Key takeaways
- Loan terms for $20,000 loans normally start at 3 months up to 30 years
- Some lenders can fund your loan in as little as 1 business day
- Beware of establishment fees and early repayment fees
Business loans available to apply for
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Learn how to compare a business loan
What’s involved with a $20,000 loan?
When you take out a loan for any amount up to $20,000, you'll naturally have to repay the borrowed sum, plus associated fees and interest within a set time frame. Depending on the loan you take out, this time frame could be as little as one month, or over as long a period as seven years.
Once you apply, the lender in question reviews your application, and upon the loan’s approval it releases the funds. You then have to make payments in accordance to the payment schedule agreed upon by you in the loan’s contract.
How you use the loan’s proceeds varies according to the kind of loan you take. Loans that are tied to a guarantee – secured loans – are usually more restrictive in what they can be used for. For instance, with a secured car loan, lenders will normally stipulate whether they will let you finance a used car.
With business loans, you generally have to spend at least a fixed percentage of the borrowed amount towards business expenses.
The features to look out for when you’re borrowing up to $20,000
When looking for a loan of up to $20,000 you’ll come by numerous options, and what you have to bear in mind is features of loans can vary considerably.
- Secured or unsecured. If you can provide some form of asset to obtain a secured loan, you can often look forward to a lower interest rate when compared to taking an unsecured loan. Security can come in the form of a car, other vehicle, real estate, machinery, or even equipment. Whether you take out a secured or unsecured business loan depends a lot on what you're looking to finance.
- Interest rate. Some loans attract fixed rates of interest and some others charge variable interest. The difference is that while the interest rate of a fixed rate loan remains the same for the entire loan term, a variable rate loan's interest can increase or decrease in accordance to the prevailing market conditions.
- Loan amount. Lenders have set maximum loan amounts, including some that have set amounts for the first time you take out a loan. Make sure you'll be able to apply for the amount your business needs.
- Fees and charges. The fee structure of loans can vary from one offering to the next, but some of the common fees you can expect to pay include application fees, disbursement fees, settlement fees and early termination fees. Some financial institutions offer certain fees waivers as well.
- Repayment flexibility. Financial institutions that give you the ability to make weekly, fortnightly, or monthly payments are easy to find. With certain loans, you can make additional payments without paying penalties, and you can also pay some loans off ahead to time without worrying about prepayment penalties.
How to find the best $20,000 loan for you – Tips on your comparison
When you’re out there looking for a loan of up to $20,000, you can use knowledge to your advantage in different ways, and here are some tips that you can rely on to take you forward.
- If you can secure your loan with an asset you might want to consider doing it – lower rates and fees are a benefit some secured loans offer
- Don’t apply for the first loan that comes your way. Make sure you compare business loan interest rates and features of loans available to you
- Choose your loan term carefully. If you can afford to make higher repayments over a shorter loan term you can save in the form of interest
- Go through all associated fees and charges of any loan you wish to apply for as this can save surprises and heartache down the road
- Understand all the features of the loan you wish to apply for. For instance, if a loan allows additional repayments, find out if it allows you to redraw these funds as well
- Make sure you deal with reputable lenders, because, sadly, the Australian lending marketplace is not devoid of its share of unscrupulous lenders
What to keep in mind before borrowing
Before you apply for a loan of up to $20,000, take the following into account:
- Establish if you really need the loan and if your business can afford the repayments
- Do you meet all the eligibility criteria? This needs to be made sure of before applying
- Take time to go through all the fees and charges associated with the loan you're looking at taking out
- Establish if you can afford to take the loan in the first place, and take your budget into account when it comes to making periodical repayments.
Need to manage cash flow?
If your business has outstanding invoices, one of your options could be invoice financing. It's a type of business loan that comes with reduced risk, no asset requirement or no interest payments.
Compare invoice financing products below.
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Frequently asked questions about $20,000 loans
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Ask a question
I have just stated working a month ago. Do I qualify for a personal loan
Hi Justine,
Thank you for your inquiry.
Depending on the lender you’re applying for the loan with. Although the eligibility criteria for personal loans is set by each individual lender and is different for each type of personal loan, basically, lenders would need three payslips, bank statements and tax returns as proofs for your income.
I suggest that before you submit a final application, you should review the criteria and get in touch with the lender to discuss your options and chances of approval.
Cheers,
May