HOW TO SELECT A BUSINESS LOAN
There are different types of business loans to suit different business needs and different stages of a business lifecycle. Selecting the right one can speed up the application process and minimise costs.
Finance for a start-up For a start-up company with no trading business or cash flow, it can be quite difficult to secure a business loan. An alternative is to take out an investment loan against the equity of your home or property. It provides flexibility and you’re more likely to secure approval.
Finance for quick cash flow Similar to a line of credit, a business overdraft can be drawn down to a certain limit, but is specifically a commercial loan that is priced accordingly - and more favourably for the business. A great option for those unspecified cash flow requirements that go with owning a business, it provides the flexibility of accessing funds without much prescription. -There are a lot of unknowns that arise in business that even the best business plans can’t cater for. This type of financing takes care of those unforeseen things.
Finance for expansion or investment Aimed at funding long-term investments, term loans are ideal for business expansion. They’re fully drawn advances for a fixed length of time with scheduled repayments. Normally secured against a valuable asset, term loans are commonly used for purchasing new equipment or moving to larger premises. There is also the option of lease finance for those who require equipment upgrade but don’t particularly want to own it.
Regardless of what kind of business you are financing, it’s always important to have a good business plan. Try to have an accurate cash flow forecast and implement a good exit strategy. Lenders want to see what you would have in place if things don’t go to plan; that’s how they make their decisions.
Book and appointment at our Manly office so we can assist with business planning and finding the right type of finance to support growth and success. -Suite 202B, 39 East Esplanade Manly NSW 2095.
You can find more information at our Loan Broking page here- http://peerwealth.smartonline.com.au/our-services/