5 things to remember when you apply for a business loan
So you want to grow your business. You have dreams, milestone goals and ideas sketched on the backs of bills.
Now what? Many businesses will need a loan – at least at some point – in order to grow. This needn’t be a daunting experience, though it usually involves quite a bit of planning and forethought.
Here are five things you need to consider when you apply for a business loan:
1. What does your business need?
What do you need to buy? You may need to purchase stock, property, vehicles, machinery, equipment and tools, and you may need to give your business a cash flow injection.
2. Write a business plan
You’ll need to clearly explain why you need finance. Write a business plan breaking down all the costs.
3. Do your research
It’s wise to research your loan options before applying for a business loan. Check out different loan types and interest rates. Visit our website to help you understand the different loan types and compare the loans we have available.
Our website also has loan calculators. These help you work out your loan repayments and are based on interest rates and loan durations. These valuable tools help you work out which loan is best for you.
Finance options include loans, lines of credit, private investors and trade credit from suppliers.
4. Consider your options
Here are some more key factors you’ll need to consider:
Every loan has different repayment terms generally from three months up to 30 years. You may have one lender who requires all loans be paid back within 24 months. Other lenders may extend payments for five or ten years. Others may base their repayment terms on the type of loan, the size of the loan or the borrower’s credit history.
Your interest rate will be based on the type, size and length of loan. It will also be determined by your credit score and if you have placed collateral on the loan.
5. What can you afford?
The most important thing to calculate is how much you can afford to pay – every month – on your loan. Remember you must repay anything you borrow, plus interest.
Find out more about Beyond Bank’s business loans and accounts.
^Chris – Business Relationship Manager