Starting up, or revamping a business is exciting. Choosing products, selecting your business location, and recruiting the right team all go into building your business. So how are you going to fund it? Consider a business loan to help you keep your business moving.
Deciding on a business loan involved involves choosing the type of loan you need, the interest rate, and the fees associated with it.
Fully Drawn Advances:
Clients draw the whole amount of the loan to fulfil your needs. Choosing this loan means that you have the whole amount upfront, without waiting for the next instalment.
If you already own and operate a business account with a bank, an overdraft facility may be available for you. An overdraft gives you access to spend more money than you have in your account. With an overdraft facility, there are limits to the amount you can overdraw, and a timeline for repayments, as well as interest rates on the withdrawn sums and penalties for non-payment of the loan.
Line of Credit:
Also called an equity loan. A line of credit is similar to a secured loan as the loan is secured against an asset or some form of collateral. A line of credit provides the funds you need to get or keep your business running.
Clients should be aware that while collateral is held as security against the line of credit, the amount of the loan may not equal the value of the collateral. For example, if you need a $100,000 business loan and your collateral is worth that amount, the financial institution will generally provide a line of credit for substantially lower than the market value of the collateral.
When choosing your business loan, you need to consider whether a fixed or a variable loan is best for you.
Fixed Interest Rate Loans:
The interest rate is set for the agreed fixed term.
Pros: The repayments are the same for the agreed fixed term, and so are easy to fit into a budget. As interest rates rise, your rate is locked, so your repayments stay the same.
Cons: As interest rates decrease, your loan repayments stay the same, so you may be paying a higher rate of interest than those on a variable rate.
Variable Interest Rate Loans:
The interest rate on your loan varies as the interest rates increases or decreases.
Pros: When interest rates fall, your loan repayments decrease, saving you money on your loan.
Cons: As interest rates rise, your loan repayments increase.
We can even help you with vehicle and equipment finance for your business. Cars, trucks, earthmoving equipment, or even a boat or a caravan! One short phone call and we can source a very competitive price. We can also ensure that the price you are paying for a car is competitive. Don’t sign a contract on a new car without getting us to check the price first through Vehicle Select.
It is a complimentary service which will search the best deal in Australia on your exact make and model.
We have saved clients from $2000 up to $11,000 on a new car purchase using this service.