It’s been a few years since the COVID pandemic has swept the globe, and many businesses are still feeling the effects. One such business is Prospa, one of the leading online lenders for small businesses. Prospa has yet to recover from the pandemic despite its size and reach, thus leaving many small businesses struggling to find funding options outside of more expensive traditional loans. While things are slowly improving for Prospa, it may be some time before they’re back to full strength. This guide will help you understand what Prospa is, how it works, and what you need to know if you’re looking for a business loan.
How Does Prospa Work?
Prospa is one of the leading online lenders for small businesses in Australia. It offers loans between $5000 on loans with no asset security or up to $300000 on a secured loan with property collateral to any business that can prove it has been in operation for at least a year. The loan size covers everything from payroll costs to inventory replenishment; pretty much anything your business might need to keep running.
You can opt for a weekly, fortnightly, or monthly repayment plan to repay the loan, which makes it easy to manage your cash flow if you’re on the tightest of budgets.
Who Can Benefit From Prospa Business Loans?
Almost any small business can benefit from a Prospa business loan. However, some companies will not be approved for a loan, including those in the adult entertainment, firearm dealers, Foreign currency exchange services, or gambling industries, to name a few. Prospa is an excellent option for business people focusing on unsecured business loans so long as you have been in business for at least 12 months and have a good credit history. Prospa offers fast approvals and rapid turnaround on loans, meaning you can get the money you need quickly to keep your business running.
How to Apply for Prospa Business Loans?
The application process is relatively straightforward. You need to provide your business name, contact information, and other basic details. Prospa will then do a credit check and, assuming you’re approved, will disburse the loan within 48hours, depending on your bank account type.
However, you need to check if you are eligible to apply for a business loan. these include:
- You are at least 18 years old.
- You are a citizen or permanent resident of Australia.
- Not operating from any of the excluded industries.
- You own a company with a valid ACN.
If you’re not sure whether you meet the eligibility requirements, Prospa has a handy tool that will help you check. Just enter your business name and contact information, and it will tell you whether or not you’re likely to be approved for a loan.
Once you’ve checked your eligibility, you can complete the application form on Prospa’s website. It will take about 15 minutes to fill out all the required fields, and you’ll receive an instant decision once your application is submitted.
Like most online lenders, Prospa bases its lending decisions on three factors: your credit score, your business history, and how much you’re asking for. Your credit score is the most crucial factor, as it determines your overall risk to Prospa.
Can you Secure Business Loan WIth Poor Credits?
If your business has a poor credit history, you may still be able to secure a business loan for bad credit in Australia through Prospa. However, the interest rate and fees on your loan will likely be higher than if you had a good credit history.
You can still do some things to improve your chances of being approved for the loan.
- Make sure that you have been trading for at least 12 months before applying, which shows Prospa that you’ve had time to get your business off the ground and build up good cash flow.
- Show that you have a good reason for needing the business loan. If possible, invest in your business to grow and expand into new areas of operation, which will improve your chances of being approved for more funding later on down the track if things go well with this first round of financing.
How Much Will the Loan Cost?
Before you apply for a Prospa business loan, it’s essential to know that you need to consider charges. These include interests, establishment fees, and late payment fees/ default fees.
- Prospa offers small business loans with an interest rate of between 9.9% p.a. to 26.9% p.a. It’s worth noting that these are representative rates only, meaning they can change based on your specific circumstances. However, you’ll find a range of loan options available to help ensure you get the right financing for your business.
- Establishment fees are one-off fees you’ll need to pay when the loan is approved. They cover things like your credit assessment, verification of qualifications and identity documents, as well as legal fees.
- Late payment fees and default charges if your business misses repayments. These will vary depending on the term of your loan agreement.
What is Prosa Doing To Remain Afloat During The Covid Pandemic?
The Prospa has been affected by the COVID pandemic, but still, they are not recovering. As a result, Prospa has implemented several cost reduction initiatives, including reducing employee travel, ceasing all discretionary spending, and renegotiating supplier contracts.
● Reducing Employee Travel
Prospa has implemented a policy whereby employees are only allowed to travel for work if necessary. Including limiting business trips overseas and within Australia.
● Ceasing All Discretionary Spending
This includes suspending the purchase of new equipment, halting marketing initiatives, and reducing headcount.
● Renegotiating supplier contracts
Prospa has been in discussions with its suppliers to reduce the cost of goods and services. It has also asked its suppliers to reduce inventory levels and increase their flexibility in delivering new contracts.
What Are The Benefits Of Work with Prospa?
Getting a loan is an easy way to get the funding you need to grow your business. Prospa offers some of the most competitive business loans in Australia. There are no asset security requirements, meaning nothing stops you from getting approved and receiving cash quickly to keep expanding.
If things go well with this first round of financing, it will be easier for you to receive funding from Prospa in the future.
In summary, Prospa is still trying to recover from the COVID pandemic. It has implemented cost-cutting initiatives, but it is still not enough. Hopefully, with time and effort, Prospa will fully recover and continue providing excellent services to its customers.