Getting more cash or a credit line for your business to increase its investment capacity or the purchasing power of your company is mandatory to stay competitive in today’s economy. This portal will explain systematically how to maximize the probabilities for your business loan application to be approved and how you can get the lowest interest rate on it, helping you to decrease the final credit cost.
How much can I borrow from a business loan?
There are several factors to take into consideration before you decide how much you are going to borrow. The first questions you need to answer is how much does your business need? What is your business payment capacity? Are you going to bond an asset to get the loan? How soon do you want to pay it back? Afterward, you need to evaluate the requirements for the amount you want to borrow, and it is always advisable to ask a 10 to 20% more than the minimum amount necessary to have enough room to cover the first couples of loan payments.
What types of business loan can I get?
There are several types of business loan in Australia with different requirements and sizes. The most popular are:
- Line-of-credit loan is a short-term loan, which extends your business cash flow or the cash in your company account to cover payments, the bank will cover automatically any check of your business up to its preset loan amount.
- Installment loans are term loans from 4 months to 20 plus years to repay them, in which you make a fixed monthly, quarterly, or biannual payment covering the interest and the principal.
- Secured loans have the lowest interest and more flexible terms, they required a collateral or asset bond as a loan Similar to those loans for buying cars, which you used and enjoy, the car but the title has a lien or lien-holder.
- Unsecured loans give you a loan without asking for any collateral, these have a higher interest rate.
- Letter of credit is a bank certification ensuring payment for goods or merchandise once you received it.
How to know which loan is best for you?
The best loan is the one with the lowest APR and the longest repayment term, which cover in full all your business financial needs. You need to review each option carefully and choose the loan easier for you to repay and big enough to make your business growth.