Business loans provide the funding you need to make progressive changes required for starting a business or expanding your current venture. Whether you are looking to buy an existing business or start your business venture from scratch, we have you covered. If you already run a business but require funds to purchase a commercial property, equipment, or vehicles, hire staff, or expand/renovate your current property, we are here to help you.
An Overdraft or a Line of Credit facility is a loan type that provides you with the flexibility you need to access and use the funds as you see fit when you need to. The great thing is that you only pay interest on the amount used, and the terms of repayments and credit limits are also flexible. Businesses use overdrafts as a quick fix to fund unexpected expenses as it helps bridge the gaps in their cash flow.
A term loan is given to the borrower for a specific purpose related to business use and is usually for 5 - 30 years. These funds can be used to purchase equipment, commercial property, acquire another business or other expenses.
In most cases, the loan is secured by either a personal or business asset. This gives the lender collateral which can be sold to recover its funds if the company defaults on the loan.
For unsecured loans, there is no asset required as security but this type of loan represents more risks to lenders which means that the interest rate will be higher. Therefore the chances of obtaining an unsecured loan are also lower however, these types of loans are beneficial to those that do not own any assets of value or those that do not prefer to risk the company or personal property.
A lease financing or an asset finance agreement allows the business to use a particular asset for an agreed period while making payments to the owner (lender). Once the period expires, you have the option to either purchase or refinance the asset. However, this is only considered when there is a residual payment known as a Balloon Payment left to be paid. The business can also decide to trade the asset for a newer version and still keep up with the lease agreement. Lease financing allows you to choose the contract terms, ensuring no unexpected fees or charges during the lease period.
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