How to save money on your Commercial LoanPublished on 13th November 2017 2017-11-13T23:45:57+00:00 - Last update on 19th November 2019 2019-11-19T15:24:45+00:00
Looking to grow your business? Achieving your goals isn’t always a straightforward matter. One of the stumbling blocks that many SMEs encounter is a lack of cash. Although this may seem discouraging, it needn’t be a restriction, providing you know how to overcome it. Did you know that a Commercial Loan could be the solution you’re looking for? Covering a wide range of finance products designed exclusively for businesses, Commercial Loans offer you the means to grow, develop and expand your business in any possible way. However, with cash being a precious commodity, one your concerns will no doubt involve the cost to your business. But, by following these tips, the total cost of finance could be less than you’d expect. To save money on your Commercial Loan, it is a good idea to:
- Compare Products
- Check whether there are any fees
- Assess how interest is calculated
- Improve your credit profile
What Commercial Loan products can I apply for?
Whenever you discuss Commercial Loans, you’re talking about a long list of business finance products and packages. To give you an idea of the scope that’s on offer, your business could choose from Secured Loans, Unsecured Loans, Asset Finance, Working Capital Finance plus many more. However, with each product working in its own unique way, you must be able to compare each of these products and identify an exact solution that’s compatible with your goals, operations and current financial situation. Applying for an inappropriate finance product could cost your business more money in the long-run, resulting in a number of negative consequences.
How can I check whether there are any additional fees?
All costs and fees should be outlined in the documents supplied by the lender. However, if you have any questions regarding their price schemes, don’t be afraid to ask them to explain further – after all, it’s part of their job. Acquiring all of the details is essential as it allows you to work out how much their product is going to cost your business, and to determine whether another product would be more suitable. Again, you need to compare products from a range of different lenders. Armed with this information, you can use it give you leverage during negotiations, helping reduce or negate some of these costs.
What should I look out for when discussing interest?
Another factor regarding the cost of finance involves interest. Although most loan providers describe their interest rates using an annual percentage rate (APR), some lenders may explain it using interest per day. For example, if a lender was to say they charge 0.5% a day, it might sound like a great rate at the time. However, when you convert it into an annual percentage rate, the true cost of finance could be more than you first thought. To demonstrate, 0.5% x 365 days = 182.5% APR, and if the interest is compounded the agreement could cost you even more. Also, some lenders may describe interest using different wording to express terms and rates – it’s essential to discuss these in detail with your lender so you clearly understand the fees and payment profile.
How can I improve my credit profile?
Lenders may ask to review your credit profile to either make a decision or to simply gain a greater understanding of your business’ performance and financial situation, although the attention paid to your credit profile can vary depending on certain products. As well as any supporting documents, such as bank statements, lenders will also look at your credit score to determine which rate of interest to offer your business. So, in summary, the weaker your credit score the more interest you’ll need to pay throughout the agreement. Therefore, if you have any outstanding arrears, CCJs or tax demands, getting them resolved before applying can help your business gain a more favourable interest rate, saving you money in the long run.
Does your business need a Commercial Loan?
In order for your business to grow and achieve its potential, you might benefit from the support a Commercial Loan offers. However, with so many different finance products to choose from, sourcing an appropriate solution can be daunting. However, you don’t need be searching for business finance on your own, especially when help is available. Regardless of what you’re trying to achieve or what sector you operate in, we can help. Our services are free and impartial, covering over 300 lenders to help you source a suitable finance solution from more than 23,000 business finance products, saving your business both time and money. So, if you’ve got a project that needs financing or you’re in need of a capital injection, apply for a Commercial Loan or find out more with Rangewell.
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