Commercial Loan Truerate Services
Commercial Loan Truerate Services, Commercial loans are available with competitive interest rates and repayment terms from our loan market leaders. It can be used to start or expand and develop your business or for the purchase of equipment. Commercial loans can be the most flexible solution to meet your financial needs, but it is also important to consider the effect of loan payments on your business ' cash flow and assets.
When looking at commercial loans, you need to assess your repayment terms and compare interest rates, known as annual percentage rates or APR, from different lenders to decide which loan is best for you. The repayment term can be between one and fifteen years on average and you have two options when it comes to interest rates: a fixed rate and a variable rate.
Fixed interest rate: the interest rate is set at the beginning of the loan term, the percentage given to you is determined by your circumstances, loan amount, term and your assessed ability to repay the loan on the due date. The amount of your monthly payment remains constant, regardless of changes in the bank's base interest rate which is an advantage if the interest rate rises but a disadvantage if it falls.
Variable interest rate: the interest rate you pay is tied to fluctuations in the bank's base interest rate and therefore can rise or fall depending on what happens in the open market. You will consistently pay the current market rate plus the agreed premium, but since the base rate is subject to change, your monthly payment can go up or down. This is an advantage if interest rates go down but you will probably pay more if interest rates go up.
There are a number of reasons why a commercial loan can be a beneficial way to raise the money you need. The first is cash flow. Because your loan repayments are agreed upon and set for the loan term, your cash management can be more predictable from month to month. Second, you have a great degree of flexibility about how you use the loan, including paying off other higher-interest loans. Commercial loans also allow you to maintain ownership in your company by making it unnecessary for you to raise funds by selling interest in your company to outside investors. Interest payments on commercial loans are also tax deductible and made with pre-tax money. The next advantage is that if you return the loan using capital equipment then you remain the legal owner of the equipment. However you should be aware that if you do not repay the loan and default, then the lender can seize any assets that support the loan and sell them to pay back the money owed.
Comparing the APR of commercial loans is a good indication of how competitive the loan is, but it is also important to pay attention to the small print on the loan agreement. If you think you may be in a position to repay the loan before the due date then you'd better check the lender's early repayment policy. Some lending companies charge interest for up to two months if you pay off the loan within 3 to 5 years and before the due date, which can increase the total cost of the loan. It may be cheaper to take out a loan with a slightly higher APR but without conversion penalties.