Does Centrelink Help with Starting a Business

Loans are almost always necessary to start a business. Few people have enough cash at their disposal to start a small business without seeking a loan of some kind, be it from a generous family member in an informal arrangement or a financial institution.

An added area of concern for millions of Australians would be whether being on Centrelink would affect their ability to secure a loan.

The good news here is you CAN be on Centrelink and get a business loan, and we will walk you through how it works and explore some of your options.

Business Loan Options for Centrelink Recipients

Private lenders assess a candidate’s financial and business history before deciding whether or not to loan money. Clearly, this can be a challenge for those on Centrelink, but it is not insurmountable.

There are some options for financing available and some lenders that will work with candidates who are on Centrelink.

If you are on Centrelink and have a solid business idea and plan, do not despair. Ebroker can match you to the right lender.



Note: If you don’t have an ABN, don’t worry! It is not difficult to get one as you start a business. Check out how to do it here.

How Much Money Can I Ask for in a Loan?

Perhaps the better question is how much the lender feels confident you can repay! There are some small loans programs of only up to $1,000, whereas on the high end they can lend small business owners up to $500,000 to get started.

While the lender will assess your ability to repay before granting you the loan, it’s good to do a bit of financial “soul searching” on your own, too. And try to settle on a realistic number and not one that will get you in well over your head.

When Do I Have to Pay Back the Loan?

This is one of the most important things to consider—the term of the loan. Be aware of the lender’s terms for a repayment period (whether it’s as short as a few weeks or as long as a few years). Only commit to a timeframe you feel confident is realistic before taking the loan.

They Rejected My Application: What Next?

While you may feel some despair, do not give up hope just yet. Ask the lender if they can give you any information about why you were rejected, and you may be able to remedy the problem and apply again in the future. Perhaps there are ways you can improve your business plan to increase your chances with lenders.

They Accepted My Application: What Will it Cost Me?

Loan costs will vary but will be based in two primary categories, fees and interests. Be sure you have read all the fine print with any loan agreement to understand, upfront, what you will be spending over the life of the loan.

Fees: Any lender is required to make their fees clear to you. They can include but are not limited to setup fees, monthly fees, schedule change fees, exit fees, and late fees.

Interest: This is the way lenders make money by charging you interest to borrow money from them. So, for example, 18% interest on a $5,000 loan would mean you would pay back $5,900 (not including fees).

One More Option for Small Business Assistance: NEIS

The New Enterprise Incentive Scheme is another way for those on Centrelink to receive financial aid toward starting a small business.

With 6,300 placements available, there is indeed a great deal of competition among outstanding applicants. And NEIS has quite a few eligibility requirements to consider.

The individual applicant must be:

  • 18 or older
  • Currently on Centrelink and eligible for jobactive or disability employment
  • Not currently going through bankruptcy
  • Available to work full time in the proposed business and receive NEIS training

Additionally, you must not have received NEIS assistance in the past three years (or ever for a similar business).

The main requirements for the business are:

  • It must be legal, upstanding, and commercially viable
  • It cannot be operating already, and it must be independent when established.
  • It must be located and operated entirely within Australia.
  • It must not be a non-profit (unless special approval has been granted)
  • It must not directly compete with an established business (or you will have to prove there is sufficient demand that has not been met)
  • It must not be based on a takeover or purchase of an existing business

Take a look at these NEIS Success Stories for inspiration as you consider whether this may be the right path for you.

Whatever you decide to pursue in terms of financial assistance to launch your business, be sure you approach it with:

  • A solid and well-thought business plan
  • A realistic view of what you can repay (and in what timeframe)
  • A willingness to accept rejection the first go-round

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