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Business Loans – Planning Prospects of Growth

07 Jun, 2012 By:admin in Business Loan,

Whether a small business or a well-established one, the need for financial aid can spring up anytime for its growth and for that, most business owners choose to rope in investors. However, sometimes it becomes hard to attract investors and borrowing money from financial institutions in order to pay the expenses comes forth as a viable option. Prior to applying for a business loan, one must familiarize with the types and procedure associated with each kind so as to make an informed decision. 
Fixed Loans
Fixed loan comes with an established interest rate that remain unchanged throughout the loan tenure. So, when the average interest rate of other business loans escalate, the interest rate of fixed loan doesn't change at all. One doesn't have to worry about fluctuating rates. He can be rest assured that he has to pay the same repayment amount every month irrespective of the ongoing rate. 
Variable Loans
Variable loans, on the flip side, come with interest rates that are vulnerable to market changes. While one avails a variable business loan at a very low interest rate, he may end up paying a larger amount after a year or so. Changing rates completely depend on the market fluctuations and sometimes dramatic changes can increase the amount so much that it may become hard for the debtor to make payments. 
Despite being risky, variable loans are often applied for by business owners as they have some benefit for the borrowers. Variable loans are a means of getting money quickly without being choked back to repay large amount each month. As compared to fixed loans, interest rates are very low in variable loans. Due to low interest rates, flexibility of borrowing larger amount and quick funding are the main reasons many business owners are willing to take the associated risk.
Credit Checks
The main concern of a lender is timely repayment of the loan and to ensure that he looks into the cash flow of the business. Therefore, one must convince the lender that the business is not facing any problems that may negatively effect its cash flow and he will make sure that loan payments are made on time. The most common documents a banker is more likely to look into are:
Business financial statements
Business plan with budget or projection
Business tax returns
Personal financial statements
Personal tax returns
Collateral
Banker will go through the collateral in order to calculate the lending amount. The most common kinds of collateral are business inventory, equipment available, accounts as well as equity in one's home. Other than that, the lender will check the track record of the business, number of years in business, size of the company and amount required. 
One must do adequate research about different kinds of loans available with various banks. Internet is the right start. One can also ask around to get a more personal advice from experienced people so that he lands in the right spot to get a business loan. 

Whether a small business or a well-established one, the need for financial aid can spring up anytime for its growth and for that, most business owners choose to rope in investors. However, sometimes it becomes hard to attract investors and borrowing money from financial institutions in order to pay the expenses comes forth as a viable option. Prior to applying for a business loan, one must familiarize with the types and procedure associated with each kind so as to make an informed decision. 

 

Fixed Loans

Fixed loan comes with an established interest rate that remain unchanged throughout the loan tenure. So, when the average interest rate of other business loans escalate, the interest rate of fixed loan doesn't change at all. One doesn't have to worry about fluctuating rates. He can be rest assured that he has to pay the same repayment amount every month irrespective of the ongoing rate. 

 

Variable Loans

Variable loans, on the flip side, come with interest rates that are vulnerable to market changes. While one avails a variable business loan at a very low interest rate, he may end up paying a larger amount after a year or so. Changing rates completely depend on the market fluctuations and sometimes dramatic changes can increase the amount so much that it may become hard for the debtor to make payments. 

 

Despite being risky, variable loans are often applied for by business owners as they have some benefit for the borrowers. Variable loans are a means of getting money quickly without being choked back to repay large amount each month. As compared to fixed loans, interest rates are very low in variable loans. Due to low interest rates, flexibility of borrowing larger amount and quick funding are the main reasons many business owners are willing to take the associated risk.

 

Credit Checks

The main concern of a lender is timely repayment of the loan and to ensure that he looks into the cash flow of the business. Therefore, one must convince the lender that the business is not facing any problems that may negatively effect its cash flow and he will make sure that loan payments are made on time. The most common documents a banker is more likely to look into are:

 

Business financial statements

Business plan with budget or projection

Business tax returns

Personal financial statements

Personal tax returns

 

Collateral

Banker will go through the collateral in order to calculate the lending amount. The most common kinds of collateral are business inventory, equipment available, accounts as well as equity in one's home. Other than that, the lender will check the track record of the business, number of years in business, size of the company and amount required. 

 

One must do adequate research about different kinds of loans available with various banks. Internet is the right start. One can also ask around to get a more personal advice from experienced people so that he lands in the right spot to get a business loan. 

Comment:(5)
on 01 Oct, 2017

I am writing this Testimony because am really grateful for what Mercedes Lucas did for me and my family, when I thought there was no hope he came and make my family feel alive again by lending us loan at a very low interest rate of 3%. Well I have been searching for a loan to settle my debts for the past three months all I met scammed and took my money until I finally met a God sent Lender. I never thought that there are still genuine loan lenders on the internet but to my greatest surprise i got my loan without wasting much time so if you are out there looking for a loan of any amount i would advise you to email via: { foroxloaninvestment@gmail.com }and be free of internet scams. thanks... Kathie Roper from California, USA.

on 25 Jul, 2017

Business loan. suresolutionsloan.com

on 27 Oct, 2016

It's like you're on a miosisn to save me time and money!

on 01 Aug, 2016

I'm started a new bizness

on 03 Nov, 2015

Business loan

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