While the world of business and entrepreneurship has evolved, so too has the lending industry. The concept of loans as we know today can be traced back to 3000 BC in the Middle East with people using food as a way to repay their debts.

In modern times when most people think of acquiring a loan, they tend to immediately think of one of the major traditional banks. However, long gone are the days when the only place to obtain a loan for personal or business purposes was the traditional bank. Where someone would make the trip down to the local bank, wait in line to speak to a representative only to be deferred to another long wait for a lending specialist. Then they would listen to their long list of terms and conditions, their lengthy application process, and wait days or weeks to know if they had been approved or not. 

Flexible business loans are an excellent choice for any small business owner wishing to increase their business potential and growth. The demand that small business owners have placed on the lending industry has only forced the industry to adapt and grow to meet the demand. Technologies and automated processes are now in place to assess applications and provide borrowers with necessary funds quickly. The online lending world has become more fluid and evolved throughout history to a seamless almost instant process now. The overall result is that business loans have become very popular with small business owners. Giving businesses the ability to use flexible business loans to buy new equipment, market themselves, hire more staff and expand their warehouses. Small business loans have supported a positive impact, growing businesses all over Australia.

More than ever the online business loan industry has increased in recent years, borrowers have benefited from a wide range of lenders to choose from with a multitude of products available to them. Lenders have had to adjust their products to make theirs more attractive and continue to apply more competitive rates of interest. 

For example Grace the dog groomer has a retail store and is attempting to branch out into mobile grooming and hire new staff to service the mobile clients. 

She needs to cover expenditures for the following in the short term, dog shampoo, water, clippers, vehicle registration, purchase of a vehicle, and wages. 

The owner is estimating that about $50,000 is needed to purchase a new van and fit it out for the new staff and to cover around 1 month of short-term wages until revenue from the new clients begins to come through. 

The owner looks at flexible business loans and chooses to take out a $50,000 unsecured loan on a 24-month loan term. At a 9% interest rate, the business is looking to have repayments of $2465.13 per month. 

6 months into the loan, she decided to branch out into another mobile van to service more clients as demand has been high. 

Grace decides to add another $50,000 on top of what is left on the loan and refinance to a fresh 24-month loan. With her lender being flexible she can make the adjustments that suit her and her business. With the client demand that is coming through she expects to be able to make the operational repayments comfortably from the cash flow from the retail store and the now two mobile groomers. 

How to spot flexible business loans?

• Variety of options

Luckily there are many different products available today to suit small business owners. The best thing to do when looking for flexible business loans is to research options. To start, look online for the type of loan that will best suit you. Modern-day loans are geared to small business owners. Most online business loan lenders have flexible business loans that are easy to apply for. 

• Terms and structure of the loan

Modern-day business loans can be different in their length of the loan, interest rates that apply and how they work. It can also differ from lender to lender. The loan type can be secured or unsecured. An unsecured loan can be a little more flexible then a secured one. In that, you won't have any collateral tied to an unsecured business loan. You could also look into flexible business loans that are lines of credit. A line of credit is simply similar to a personal credit card in how it works. You will have an amount of money that you borrow and you will only pay interest on what you use in your line of credit. Therefore if you never use it, you will essentially never pay interest on it. Each lender and loan type so research before be sure to do your applying. 

• Repayment flexibility

This can be flexible or inflexible, it can also be adjustable depending on the loan type you choose. The most common repayment periods for unsecured flexible business loans tend to vary between 12 months and 3 years. If you have chosen to secure your loan then a repayment period could be longer and could be a little more inflexible. If it is a secured loan your repayment period could be even longer. Some online loan providers specialize in enabling small businesses with flexible loan repayment periods. Online lenders also tend to have online free calculators that can be used to play around and work out the best repayment options for your business before applying. 

• Fixed or Variable Interest Rates

Surprisingly interest rates can be flexible or inflexible as well. They can be higher or lower depending on your credit assessment, credit score, credit history, the length of the loan you apply for, and the loan type. Interest rates can also be fixed or variable. When using an online calculator you can view what your repayments will be inclusive of the interest rates of the loan. 

• Any additional fees that may apply

Transparency is key when looking for flexible business loans. Make sure that all fees, including early exit fees, are visible or they make it very clear what fees will be applicable over the term of your loan. Things to look out for include loan start-up fees, change fees, interest rate fees and early exit fees. Choose a lender that is open and clear about any fees.