Guide to loans for stagnant businesses
Has your business growth plateaued? There are financing options you can consider.
Key takeaways
- Stagnant businesses often need finance for marketing, human resources or product redesign to stimulate growth.
- Explore options like line of credit up to $1,000,000, term loans or invoice financing for varied needs.
- Lenders often require $5,000-$10,000 monthly revenue; compare fees, rates and flexibility carefully.
With the discourse centring on innovation and entrepreneurship, it can be easy to be lulled into a false sense of security that continued business growth is inevitable. However, businesses of all sizes can go through stages where profits level out, and you may need financing to kick your business back into gear. This is the guide to read if your business is in that stage.
Business Guide 5:When is a business stagnant?
This is essentially when business growth plateaus. This may be due to an ongoing reduction in profit, to revenue slipping at a time of year when it should be increasing, or it becoming necessary to cut back in areas, such as marketing, which the business has not had a problem covering in the past.
Not the stage your business is at? Explore other options:
Funding needs that are common for stagnant businesses
Stagnant businesses can be in any industry and can be of any size, making their funding needs varied:
- Marketing. Due to decreased or plateaued profits, you may have cut back on your marketing budget. This is not the time to be cutting back, but it's sometimes a necessity. You may be looking for funding to be able to pay for this and generate new revenue for the business.
- Human resources. There are several reasons a business may become stagnant, but this position may lead to failings in human resources, which impact the customer. By investing in your staff for customer service or product development, or hiring additional staff to assist with growth, you may be able to help your business expand.
- Product or service redesign. Some businesses have a successful product or service at first, but they fall into stagnation due to lack of development or innovation. By seeking finance to expand your product line, re-innovate it or even just do market research, you can assist your business.
- Hire outside help. It can be difficult to diagnose business issues if you're entrenched in the business's practices, which can make hiring outside expertise a good investment. You may opt for organisational experts, designers for marketing or website help or a PR agency that can drum up some interest in your business.
What types of finance are available?
| Loan type | Loan amount | How it works | What to consider |
|---|---|---|---|
| Line of credit | $10,000–$1,000,000 | Repay only what you use of the credit line, plus fees and interest |
|
| Term loan | $10,000–$500,000 | Make regular repayments over a set term, calculated at a fixed or variable rate |
|
| Business overdraft | $10,000–$100,000,000 | Make the minimum monthly repayments of any balance that you use |
|
| Invoice financing | 80% of the invoice amount | Pay fees to bring your outstanding invoices forward |
|
Compare business loan options
Compare other products
How we picked these
Finder Score for business loans
We assess over 150 business loan products for their rates, fees and important features, assigning them a score out of 10.
Compare other products
How we picked these
Finder Score for business loans
We assess over 150 business loan products for their rates, fees and important features, assigning them a score out of 10.
Useful guides for stagnant businesses
How to compare your business loan options
If you're unsure what loan you should opt for, here's how you can compare business loans:
- Loan amount. You will have a general idea of how much your business needs to borrow, so make sure the lender offers this. Business lenders usually have minimum and maximum amounts available, and if you're taking out a secured loan, it will depend on how much your security is worth.
- Interest rates. Lenders will charge a fixed or variable rate, or a factor rate, which is calculated differently. Check what type of interest rate will be charged and how high it is to get an idea of how competitive the loan is. Remember, the comparison rate will show you a representation of the interest rate plus fees.
- Fees. You can be charged a whole range of fees with business loans. These can include upfront fees such as establishment and application fees, or ongoing fees such as monthly or annual fees. Late fees and default fees will also apply.
- Turnaround time. How soon do you need the funds? Alternative lenders can give you your money in 24–48 hours, but more traditional lenders may take longer. Be sure to check that the turnaround time meets your needs before you apply.
- Flexibility. As your business is stagnant, you may need a more flexible loan than what is offered. For instance, can you borrow more funds easily if you need to? Are you able to repay the loan early without penalty, or make additional repayments? Verify the flexibility of the loan before you apply.
How much does my business need to be making to be eligible?
| Business lender | Minimum revenue | Other criteria | Find out more |
|---|---|---|---|
| Banjo Loans | $500,000 per year |
| More |
| Bigstone | $250,000 per year |
| More |
| Business Fuel Loans | $10,000 per month |
| More |
| Capify | $10,000 per month |
| More |
| GetCapital | $10,000 per month |
| More |
| Kikka | $10,000 per month |
| More |
| NAB | No minimum |
| More |
| Max Funding | No minimum |
| More |
| Merchant Cash | $5,000 per month |
| More |
| MiFinance | $400 per week (personal income) |
| More |
| Moula | $5,000 per month |
| More |
| OnDeck | $100,000 per year |
| More |
| Prospa | No minimum |
| More |
| Spotcap | $100,000 per year |
| More |
| ThinCats | No minimum |
| More |
Frequently asked questions
Sources
More resources on Finder
Ask a question
More guides on Finder
-
St.George Vehicle and Equipment Finance
Looking to purchase new equipment for your business? Find out how you could benefit from a vehicle and equipment loan from St.George. Compare and apply today.
-
Business debt consolidation loans
Business loans for debt consolidation can help you manage your debts and save your business money.
-
The lowdown on cash flow finance
If your business is suffering from poor cash flow, consider one of several cash flow finance options to tide you over while waiting for your invoices to be paid.
-
Pharmacy loans: What are they and is it right for your business
Thinking of buying a pharmacy? Check out this guide to choosing the right pharmacy and finding the right pharmacy loan.
-
Low doc business loans
We’ve written about how you can get a business loan without providing extensive documentation.
-
Guide to loans for businesses in decline
Experiencing a business downturn? Your guide to finance.
-
Spot factoring
Is your business in a cash flow squeeze? Find out how spot factoring can ease your cash flow troubles in as little as 24 hours, even if you have no collateral.
-
How to split profits in a small business partnership
What you need to know about dividing profits in a small business partnership.
-
Compare loans to buy an existing business
Find out how to achieve your small business dreams by getting funding to buy a small business.
-
$20,000 business loans
There's a range of options available for you to finance purchases for your small business, so find out how best to pay for assets under $20,000.