You have to prepare and fully understand the loan you are getting your business into or else it can lead to severe and irreversible issues. To make it easy for everyone, we have created a checklist to help you avoid the common pitfalls.
Have a clear direction as to where you'll use the money you'll be borrowing.
Outline the things you'll do with the money you are borrowing. Doing so will help you identify the exact amount you'll need and when you'll need it.
It is not a good idea to get a loan if you do not have a clear purpose for the money. Remember that the interest is applied whether you use it or you're just keeping it.
Make sure that you have the means to pay for the amount you are borrowing.
Short term loan means you'll have to make higher payments monthly. Map out your means to pay the short term loan even when clients have not paid their invoice yet.
Assess your cash flow to know if you can indeed pay the monthly amortisation before even applying for the loan. Speak to us to get a back up plan in place to refinance your short term loan
Check your credit score/rating.
Knowing your credit score will give you reasonable expectations in terms of your loan. You will have an idea of how stringent the loan process will be and the interest rate you will likely get which will help you plan accordingly.
Find the best lender.
Do not jump on the first lender / opportunity that you come across. Research to consider additional flexibility and make sure you thoroughly understand the contract (especially in times of a recession).
Compare loan offers and features.
Check the interest rates and ask for specific features of the loan, then compare it with other lenders. Knowing the rates will give you a realistic view of your monthly payments.
Understand the difference between variable interest and fixed interest, and how it can help you during your loan period.
Short Term Business Loans FAQ
I have a bad credit rating, can I still get approved?
Most banks believe in second chances, and they give short term loans to bad credits as responsibly as possible. However, a low credit rating could lead to banks being more stringent with the requirements.
How does it work?
A short term loan has a repayment period of less than 24 months. Although, some banks offer more flexibility, e.g. up to 36 months, which doesn’t take the loan into long-term territory
How can we help?
If your business has a turnover of more than $6,000 per month and can demonstrate six months of trading for a new business, or three months if you have purchased an existing business, we can help you find the right funding for your business needs.
What are usual features of these business loans?
No ongoing loan account fees. Save thousands of dollars over the term of the loan, leaving you more money to grow your business. Best to discuss your individual needs so that we can help you find the right loan.
What are the available flexible repayment options?
It is possible to tailor the repayment options to suit your requirements, i.e. principal and interest or interest-only or redraw advance payments when you need to.
What is the variety of loans available?
Choose between variable or fixed interest rate loans. Or lock in your rate so that you can budget for your business with certainty.
How soon can I get funded?
If you require short term funding, a line of credit may be the solution and can be funded, on average, within 48 hours and up to $100,000 with only 6 months of bank statements. Secured commercial loans will take longer.
Can I ask Sandcastle Finance questions online?
We find the quickest way to progress your query is through our free call service. Simply book in a time that suits you here