Choosing Your Tradie Finance Options

There’s no question that tradies make up a huge portion of small businesses in Australia, with a lot of them being self-employed or sole contractors. But what does that mean when looking for a business loan?

Well, there are many different things to consider when looking for business finance and the list is just as long, if not longer, for construction and technical service tradesmen.

Tradies that are self-employed or running their own small to medium businesses need to pick a flexible funding option that suits their profession. Here are a few key points to consider when looking for tradie finance:

How Fast is the Approval Process?

While a traditional bank may be the first option for many tradies looking for a business loan, they aren’t always the fastest when you deal directly with a bank manager. You may just need stock or tools to finish up your latest job and with some banks, you could be waiting weeks or months for the loan to come through.

That’s a long time to be waiting to finish up a job and could end up costing more in time wasted. At QPF we hold finance accreditations with all of the major banks and financial institutions, but we also have direct access to a number of smaller niche funders that provide funding for new ventures, specialised assets or applications not suited to the major banks. We’ve built and maintained strong relationships with our lender partners for more than 40 years, which means we can generally turnaround your loans in 48 hours!

Does the Lender Require Security?

This one can be a bit tough for self-employed tradies. Unfortunately, a lot of lenders will require the borrower to put up some sort of security as collateral for a loan.

While secured loans do end up being a bit cheaper than unsecured loans, many self-employed and sole contractor tradies (and even some running their own SME) often can’t or won’t want to put up their house as collateral for a business loan.

It’s worth looking into the security conditions in a loan agreement – especially if the loan is for something like equipment or working capital. You may not end up saving all that much on a secured finance option.

How Long are the Terms?

For some, the term won’t really matter, but there will be a lot of self-employed tradies out there who won’t need a two-year loan for something like a new set of tools. Some lenders do offer shorter terms, from six to 12 months, making the loan cheaper and lot more manageable. Ask your Broker if you’d like to look at the different repayment schedules when looking for a tradie business loan.

What is the Loan For?

Finally, what’s the purpose of the loan? Some of the most common reasons for tradie business loans are vehicle or equipment finance. A tradie will know better than most the value of a good set of tools and a reliable workhorse, so these will be by no means cheap.

However, that also doesn’t mean you will need a huge, drawn out loan. Shorter terms with a flexible repayment schedule could be better suited to a loan like this. Being able to make repayments early, without penalty, is invaluable.

For a self-employed tradie, choosing the right finance option is important. Now that you have the basics down pat, spend your time where it matters and let us secure the right loan for your needs.

If you have any questions or want to chat about tradie business loans in general, feel free to give us a call on 1300 736 780 or get a quote.