Choosing the right business loan for your growth plans

Business loans can support working capital, inventory, equipment purchases or expansion. The right choice depends on what the money is for, how quickly you need it and how much you can repay from business cash flows.

Match the loan to the need

Short-term needs such as inventory or seasonal expenses are usually better served by working capital products, while equipment or expansion may suit a term loan with a longer repayment period.

“Match the tenure of the loan to the life of what you are financing.”

What lenders check

Lenders commonly consider business vintage, turnover, profitability, bank statements and the credit history of the business and its owners. Having your GST filings and financial statements in order helps.

Some business loans need collateral while others do not. Compare the total cost, not just the interest rate, including processing fees and other charges.