Access a faster, simpler application for business loans

As more businesses look to refinance or become more financially resilient, it’s timely that ANZ has made it easier and faster for eligible businesses to apply for secured and unsecured loans.

It means a broad range of enterprises can benefit from a simpler and faster lending process – regardless of the loan type.

The streamlined application process, first launched in 2022 for secured loans, now extends to unsecured lending. Minimal documentation is required from a business owner, and a decision is delivered quickly. The process saves business owners time and effort, and a faster decision reduces the stress of waiting for an outcome.

Secured or unsecured – what are the differences?

Both secured and unsecured funding can be useful in supporting a business to grow, say ANZ Business Banking Managers Rob Turner and Jennifer Nguyen.

“The main difference between the two is that unsecured loans are approved based on a business’s performance and ability to repay,” says Nguyen. “In contrast, secured loans require some form of collateral, typically property or the asset being purchased, as well as assessing the borrower’s capacity to repay. Putting up security may allow more to be borrowed – up to $1 million using a streamlined application process.”

“Both secured and unsecured loans have their place. If it’s a commercial property being purchased, for example, a mortgage against the property can be a good option,” says Turner.

This is because a secured loan will typically have a lower interest rate than an unsecured loan –making a secured loan more cost effective for the business. Right now, with rising inflation and interest rates, more businesses are looking to refinance loans over longer terms with security.

“It's a very active refinance market at the moment because everyone's trying to find the best bang for their buck,” says Nguyen. “Aside from getting a better rate, the benefit of having the loan secured is we may allow a loan term for up to 30 years which reduces the repayment.”

In contrast, an unsecured loan typically has a five- to seven-year term.

Unsecured lending is making finance more accessible

Both Nguyen and Turner emphasise that while having collateral may improve loan terms, in some circumstances unsecured lending may be a better option for a business.

Turner cites the example of a construction company that obtained a five-year unsecured loan to purchase specialised equipment.

“The equipment’s value to the business is exceptional because it allows the business to save money and complete more work, generate more revenue and more profit,” says Turner.

“However, the capital value of the equipment wasn’t sufficient to secure the loan. The customer didn't have other security available, so the loan was unsecured. If there was security, the interest rate would’ve been lower – even though the term would have stayed the same.

“So, it’s not that one type of loan is better or worse – it's just what’s best for that particular customer. Every situation is different, every loan scenario is different.”

Simpler applications, faster approval and time to cash

Using the streamlined process, more businesses are taking advantage of an easier loan application process for secured or unsecured loans – typically getting a decision within five days.

Turner gives the example of a refinanced loan secured against a commercial property worth $1.2 million. The loan was for $400,000 over a 30-year period with the first 10 years interest-only.

“The customer had a well-defined strategy,” Turner says. “He wanted interest-only so he could funnel surplus business cash towards paying off his personal lending.”

The customer applied for a streamlined loan and supplied self-declared financial statements, Business Activity Statements (BAS) and evidence they didn’t owe the ATO anything. From there it was a straightforward process.

“It was really, really simple,” says Turner. “From the time of engagement, discussion, approval – it was four business days. The process worked exceptionally well.”

Streamlined unsecured lending up to $300,000

Simplified processes for unsecured funding now make it easier for eligible businesses to access up to $300,000 in lending and overdrafts of up to $100,000. This means ANZ currently offers one of the most competitive streamlined unsecured business loans available in Australia. 

Businesses can apply by showing they have no outstanding ATO debts, providing BAS for the past 12 months, and self-declaring their financial position. Business owners who receive an income from their business will need to provide an ATO income statement.

Crucially, a business can still be eligible even if it’s had issues in the past with its BAS lodgements or ATO payments – and an accountant doesn’t need to provide financial statements.

Nguyen gave an example of how ANZ’s simplified application process can help a small business. Until recently, an importer bringing in beauty products from China was only able to obtain short-term trade finance as his business is relatively new. Under the streamlined unsecured loan process, the business can access a $300,000 loan using only one year of BAS and an up-to-date ATO income statement.

“So now the business owner is able to purchase his next shipment with our bank funding, using our streamlined process,” says Nguyen.

Learn more

Contact an ANZ business banker or your Broker Account Manager about the streamlined lending options available to help your customers or talk to ANZ about becoming a commercial broker.

Note: This article was originally published on the Mortgage Professional Australia website.