Small business loans can be great when you need to get your brand up and running or cover unexpected expenses. However, it’s useful to understand the difference between the available options before committing to one.

To help you make the right choice, here’s what you need to know about some of the more commonly used business loans.

LINE OF CREDIT / OVERDRAFT FACILITY

A line of credit involves overdrawing on your business’s bank account up to an amount approved by your financial institution. This is commonly used for short-term capital, or as a source of cash flow to keep operations running smoothly.

 

BANK TERM LOAN (SECURED OR UNSECURED)

A bank term loan is a medium-to-long-term loan option commonly used for purchasing equipment or covering business start-up costs. It involves borrowing form a lender and making regular repayments over an agreed period.

MORTGAGE LOAN

A mortgage loan can be used to cover most of the upfront costs of purchasing a property for your business. The property is then used as collateral by your lender until you’re able to repay the loan amount and the incurred interest.

LEASE FINANCING

Used primarily for equipment and vehicle purchases, lease financing means the lender owns the asset and charges the business a hire fee. At the end of the lease agreement, the business may be able to refinance or purchase the asset.

Looking for the right business loan?

Understanding how the different commercial loans vary can help you choose one that best suits your business needs. Make sure you speak with our professional commercial specialists before making any decisions to ensure your business gets the right level of financial support.

Suchint Kharbanda

Commercial Finance Broker

0413 874 018

Suchint has more than 10 years’ experience working within the major banks. Her areas of specialisation are in the complex lending areas such as development and startup funding, sophisticated corporate structures, lending against unconventional securities. Suchint draws upon her years of experience to first fully understand her client’s objectives and requirements before presenting a tailored lending solution.

Tony Whelan

Commercial Finance Broker

0401 246 979

Tony has always had a passion in business development. His extensive experience with different roles in the banking industry has proven invaluable in understanding his client’s objectives and business goals. Tony shares his wealth of knowledge and benefits to his clients.