Business loans allow business owners to grow, expand or finance a particular aspect of their business. They generally have relatively flexible terms, such as different types of interest; capped, fixed rate or residentially secured, for example. They are offered by most banks and financial institutions. Interest rates on business loans are generally around seven to ten percent, which is higher than home loans (about six to seven percent), as they are less secure.
Loan structure, fees and business credit cards
Most business loans offer a range of interest rates, fixed or variable repayment terms, and fixed terms between one and 25 years. The minimum loan amount is usually between $5,000 and $10,000 and secured by residential property. There are commonly establishment, guaranteed rate and monthly account keeping fees.
Other financial benefits are available to small businesses. For example, American Express Australia offers the Small Business Card, which features either credit or charge facilities, allowing you to control and account for your expenditure more accurately. Many financial institutions, such as NAB, offer specialised credit for businesses. The Commonwealth Bank also offers a small business loan, which is advertised as flexibly providing for your business growth needs. They also offer a Business Line Of Credit, available for approved amounts from $50,000. See your financial institution about what they offer, but shop around too. Business credit cards may also help you to manage your business's finances.
Business loan advice and finding a financial adviser
Some options for further advice and assistance include business.gov.au, a federal government initiative to encourage small business success. It may also be worth employing the services of a financial adviser (choosing a licensed adviser/financial advisory business is recommended). The Australian Securities and Investment Commission (ASIC) offers advice about how to find the right adviser for you.