Yes, there are funds available to you
If you have a vision for a new business, good news – you’re in the right country. Australia has a number of business startup loans for unemployed people that rival some of Silicon Valley’s best venture capitalists.
However, applying for a loan once you’re unemployed can feel like an endless runaround. How do you show that you’re financially stable if you have no income?
With the right plan and a good credit history, you can get a sizable loan to start your new journey as a business owner. If you go in with a good plan, you can secure a business startup loan for unemployed entre you need in a short period of time.
Scroll down for more information on the best way to get the business startup loans for unemployed entrepreneurs that works best for you.
Unemployment, credit, and your cash flow
Unemployment alone doesn’t necessarily mean you have bad credit. However, if you missed any loan payments or paid late on anything you owed during your unemployment, that could cause a problem.
Any late or missed payments create issues for your credit report. Make sure you have a copy of your own credit long before you apply for any business startup loans for unemployed borrowers.
Bad credit will make your interest rates skyrocket, so do everything you can to get your credit score up before you apply for anything.
If you’re facing unemployment in the near future, there are a few things you can do to keep yourself solvent.
- Research any unemployment assistance available – These payments take time to process and land in your bank account. Have your paperwork filled out and familiarise yourself with the process before you need it.
- Build up your savings – Everyone should have a savings account because we can all face unemployment unexpectedly. Save as much as you can anytime you have an income to keep yourself safe.
- Analyze your spending – Look for smaller, cheaper places to live, cancel subscriptions, and give yourself a written budget to follow each month. Don’t be shy about asking for advice; you likely know lots of people who can help you cut back on everyday expenses.
- Take stock of your assets – If you own your home, or part of your home, consider applying for a home equity line of credit for a temporary income. Also make a list of anything you can sell or rent out to help you stay financially stable.
Once you know where you stand financially, you can move forward with any business startup loans for unemployed borrowers like you.
How to calculate what you can afford
Before you can apply for a startup business loan for unemployed borrowers, you need to write up a complete business plan and calculate exactly how much your new business requires to open its doors. You can find a great resource on how to write a business plan here.
Once you know exactly what you need to borrow, talk to a loan officer about how long you need to pay it back. Your interest rate will adjust as you change your timeline.
Then, you need to decide how you’ll pay it back. You can choose to payback the interest only, which will lower your payments but keep you in debt for a longer period of time.
Alternatively, you can pay your back in principal plust interest – a more expensive option but one that will cut your repayment schedule down significantly. A business startup loan for unemployed people doesn’t function on a different structure; it’s essentially a standar loan that takes your potential earnings into consideration.
Finally, schedule in any additional payments that you can afford. These extra payments help you pay off your loan faster as they augment your original repayment schedule.
How business startup loans for unemployed borrowers come together
Grab your business plan and your new budget. You need both to get together as many numbers as possible before you apply for your loan.
Print out any financial statements you have. If you let a house or have a savings account, print out evidence of each one so you can share your financial situation with your loan officer.
Make sure you have future projections of what you’ll earn included in your business plan. Do not exaggerate your future earnings – business startup loans for unemployed entrepreneurs rely on hard, accurate projections. Make sure yours are solid.
Then discuss your financial limits with your loan officer. Take a look at your budget and make sure you only offer a monthly repayment you can afford before you sign up for a business startup loan for unemployed entrepreneurs such as yourself.
List out any assets, (your house, your bank account), against which you can borrow and anyone willing to guarantee your loan, if necessary. Then go over how much of your equity you can share with investors and how much of it remains in your name.
Once you have all of that and your application form, your loan officer can find the best business startup loan for unemployed people such as yourself and show you the agreement. Feel free to bring a second person to your appointment and get a second pair of eyes on your loan structure – this is your money and you need to keep it safe.
Are you looking for a business startup loan for unemployed applicants?
Don’t dream about starting your own business, make it a reality. Contact LendEasy today to learn more about how we can help you get you a business startup loans for unemployed borrowers and help get the right repayment structure for you.