Commercial Loan FAQs

If you’re thinking about getting a commercial loan, you probably have plenty of questions. Here are the most common ones we get from our business clients.

What can you use a commercial loan for?

  • Buying a business.
  • Helping your business to grow.
  • To buy business premises. For example, office, retail, warehouse or factory space.

What types of commercial loans are there?

  • Lines of credit.

A commercial line of credit allows you to borrow up to an approved credit limit. You don’t pay any interest unless you use the line of credit. But you’ll usually have to pay a fee for having it available.

  • Overdraft facilities.

Overdraft facilities can be linked to your business bank account. They allow you to overdraw your account. That can be useful for temporary business cash flow issues. You will usually pay fees for having an account with an overdraft facility. You also pay interest on any overdrawn balance.

  • Standard business loans.

Standard business loans allow you to borrow a specific amount for a set period of time. Commercial loan terms vary among lenders, but usually range between one and seven years. You need to make regular repayments of the principal (the amount you borrow) plus interest .

  • Asset and equipment finance.

Asset and equipment finance can help you to buy the vehicles or equipment that you need to run or grow your business. It could include finance to purchase the assets and equipment outright, or to enter into leasing arrangements.

The government is offering a major tax incentive for buying business assets at the moment. It has enhanced the instant asset write-off scheme.

What should you consider when taking out a commercial loan?

  • The interest rate.
  • Any loan fees and charges
  • Your repayments.

Interest and fees on commercial (business) loans are tax deductible. The comparison rate includes the cost of loan interest and fees.

How much can you borrow?

Different lenders have different policies. Some will be prepared to lend more than others. As with any loan, your borrowing power will depend on how much you can afford to repay.

How we can help

Taking out a commercial loan is a big decision. It’s important to explore your options. Our experienced and licensed brokers at Wisebuy Investment Group in Newcastle can help you to find the right commercial loan. We can also help you with your loan application.

Contact us today for an no obligation chat! We’ll take the time to understand your business finance needs before providing you with the right advice.