Are you ready to take control of your finances and reach your business goals? The first step towards growth is having the finances available to turn your dreams into a reality, yet not all business owners know which loan options are available to them on their business journey. That’s where Kudos Money comes in - we’ve already explored the most popular options for you!
Business loans are the most common finance choice for small businesses. They are a flexible way to borrow a lump sum, with many options to choose from that can cater to your specific needs. When considering a business loan, your finance broker can sit down with you and discuss the best option on the market for your business in its current position and its future growth, taking into consideration your long term goals.
Merchant cash advance
If you’re a business that receives revenue through credit card and EFTPOS payments, you can use a merchant cash advance as a short-term financing tool. A merchant cash advance is a lump payment that a lender provides a business, allowing them to borrow money based on their account sales.
When opting for a merchant cash advance, your lender will provide you with a sum of money which is then paid off through a percentage of your future sales. The loan is then paid off over time while the lender takes an agreed percentage of the business transactions. The benefit to this loan option is that your repayments will align with your businesses cash flow. You’ll pay the loan back quicker when business is busy and slower during low periods.
If invoices are paid late your business operations shouldn’t have to suffer. Through invoice finance, you’re able to receive a percentage of your invoice amount as an upfront loan from a lender. Once the invoice is paid you’ll then receive the remaining portion of the funds, minus your lender’s fee or charges.
Invoice finance can be the beneficial option when; a customer places a large order and you need to buy more stock, when cash flow is low and you can’t pay your suppliers or simply when your business is growing faster than expected and you need extra cash to fund your growth.
Looking to purchase new equipment? Then an equipment loan may be the best choice for you. Equipment loans allow you to purchase assets for your business such as; vehicles, technology and machinery. An equipment finance loan is usually secured against the asset that you’ve purchased with it. When utilising this type of loan you’re not required to put up any security of your own, but if you don’t meet repayment deadlines the equipment could be repossessed.
Line of credit
A line of credit is a pre-set amount of money that a bank or credit union agrees to lend you, giving you access to cash flow at an ongoing basis. You can draw from this line of credit when you need it, up to the maximum agreed amount and you’ll only have to pay interest on the funds you draw out. This option gives you more flexibility in comparison to a fixed-term loan, as you can take cash out over an extended period.
Now that you know some of the options available for commercial loans, have you considered which one is the best solution for you? Contact us at Kudos Money today for a chat about your business finance needs- we’re only a phone call away!
* This article doesn’t take your unique circumstances into account and cannot be classified as nor deemed advice. Please get in touch to discuss your specific loan requirements.