For startups and new businesses in Australia, access to reliable and consistent cash flow can be the deciding factor in your long-term success.
Ensuring ongoing growth and operation is often a function of being able to access the working capital you need to meet daily business expenses and invest in time-sensitive market opportunities. Fortunately, with the ScotPac team behind you, you can access the startup funding you need to succeed with a line of credit.
Explore our line of credit product offering here.
Can startups access a Business Line of Credit?
New businesses and startups, understandably, have limited trading history. This can be a barrier for some forms of business finance, so it is also understandable that the same assumption is made about a business line of credit.
However, a business line of credit is actually more accessible than many startups realise. ScotPac, unlike traditional lenders such as banks, has cut much of the red tape and eligibility criteria to help more and more new businesses grow and succeed.
How can Startups Qualify for a Line of Credit?
What are the minimum criteria for a new business or startup to be eligible for a business line of credit from ScotPac?
It comes down to a few main items:
- At least 12 months of consistent business trading
- Demonstrated $50,000 in monthly sales on average
- The business owners must be 18 years or older and either an Australian citizen or permanent resident.
If your startup ticks all these criteria, and you have the cash flow and business records to back your application up, you can secure a revolving line of credit that helps your business scale sustainably and effectively.
Should new businesses apply for a line of credit?
How does a business line of credit work?
How does it help startups to grow and expand?
A line of credit operates in a similar way from an overdraft, however:
- It is a revolving line of credit meaning as you pay back the funds you can re-borrow them
- You only pay interest on the funds you borrow
- Your line of credit facility is separate from your business account
How is a line of credit useful for startups?
With access to a revolving line of credit whenever you need, you can:
- Fund supplier payments
- Purchase new inventory at bulk price
- Bridge gaps in your short-term cash flow
- Meet payroll
- Fund ongoing business operations
- Invest in market growth
A line of credit helps new businesses and startups smooth their sometimes unpredictable early-stage cash flow.
When should new businesses not apply for a line of credit?
Whilst ScotPac certainly has lower lending criteria compared to banking institutions, there are still instances where new businesses or startups may not be eligible.
- Less than a year of trading history
- Less than $50,000 in monthly sales
- Cash flow that is too inconsistent
However, that does not mean that as a new business owner there are no alternative funding options with ScotPac.
Invoice Finance
For business-to-business startups, Invoice Finance offers an opportunity to unlock cash tied up in unpaid and owed invoices.
Trade Finance
For domestic and internationally trading new businesses, trade finance offers to pay your suppliers upfront and allows you to extend your repayment terms.
Asset Finance
With ScotPac, we offer flexible funding options to help you invest in the equipment or inventory you need.
Make sure to speak to a ScotPac lending specialist today to find out more about the alternatives available to you for faster access to more flexible working capital solutions.
How can you get started with ScotPac today?
ScotPac is committed to providing fast and flexible funding to help every business. We have been working with startups and new businesses throughout Australia for over 35 years and currently support more than 9,300 businesses.
Our working capital solutions help businesses fuel their success and we would love to help you in the exact same way.
