Are There Establishment Fees For A Business Loan?
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There are lots to consider when applying for a business loan. You might be wondering if there are establishment fees for a business loan, and the answer is usually yes. Each lender is different, however, most lenders do charge a fee for setting up a loan. The amount, however, is generally up to your lender and will depend on the type and size of your loan.
Read on below to find out everything you need to know about establishment fees for a business loan.
Are there establishment fees for a business loan?
Depending on your lender, you may find that there are establishment fees for a business loan. Generally, your loan will have three different types of fees attached to it. An ongoing fee is charged for the administration of the loan, and will generally be charged for the life of the loan. An upfront fee is an establishment fee that is usually charged for setting up your loan and can vary depending on the size of the loan in question.
The last fee is usually the interest rate, which may be charged on the balance of the loan. The amount of all of these fees depends on your lender and the size of the loan you decide to take out. The type of business loan that you apply for may also affect any fees that you will need to pay over the course of your loan.
The different types of business loans
- Line of credit – As opposed to a loan, a line of credit is not one singular lump sum payment. Instead, it is an agreed-upon amount of credit from your lender that you can withdraw as you need it. In most cases, you only need to pay interest on the amount you use, instead of paying interest on the total sum.
- Secured loan – A secured business loan requires you to use an asset that you have, such as property or existing business as collateral against the loan.
- Unsecured loan – With this type of loan, you are not required to put up any collateral as with a secured loan.
- Fixed-rate loan – Similar to other types of loans, a business loan can come with either a fixed or variable interest rate. A fixed-rate is set by your lender for a period of time, usually between one and five years.
- Variable-rate loan – In a variable rate loan, the interest can be changed month by month at the discretion of your lender.
What do I need for a business loan?
Unlike regular personal loans, lenders will often require more documentation for a business loan application. You may need to have the following documents in order to apply for your loan:
- Personal identification – such as a driver’s licence or birth certificate to prove your address and identity
- Business verification – You will need to be able to prove your ownership of the business, and where it is registered to
- Financial history – Your lender will generally want to see how strong both your personal and business finances are. They may need to see bank statements, profit and loss statements, and other financial documentation before they approve your loan.
Depending on your lender, they may require extra, or different documentation in order to approve your loan. It’s always best to check with your lender as you are applying so that you’ll know what you need to provide, and when.
Where does Tiger Finance come in?
Tiger Finance can help you to get a loan easily. You will have a free consultation with one of our specialists, and we will tailor-make you a loan. We will negotiate with lenders on your behalf before you are approved.
We have helped countless Australians with both good and bad credit ratings to be funded for their dream business. We understand that lending criteria from other lenders are too strict, and can stop you from achieving your goals. That is wrong, and it should not hold you back.
How we can help
Our finance specialists can help you find the right business loan for your project. Business loans are a complicated topic, but we will find a loan that makes your dream project that much easier.
If you are one of the many Australians finding getting a business loan difficult, Tiger Finance can make the process simple and pain-free. Contact us today for your free initial consultation.
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