The Benefit Of A Business Loan Capital Repayment Holiday
If you are considering applying for a business loan then one thing that you may wish to consider, if such an option is available to you, is a repayment holiday for a period of time. So, what is this?
Well, some lenders may be agreeable to you not making any repayment of the amount you have borrowed in say the first 3 months of the business loan being set up. All that you may need to do is cover the interest during that period. Many of the major lenders offer such an option but the terms may vary.
So, what is the benefit? Well, it will assist your cash flow at what may be a critical period in the development of your business as you will not have to pay back any of the amount you have borrowed for the period of the repayment holiday. The monies that you do not have to use for this purpose could be used for something else such as to increase your stock levels or possibly to conduct an effective marketing campaign to generate new clients.
On the downside, this will mean that you either have to borrow the money over an extended period of time or that you increase the monthly business loan repayments to ensure the borrowing is liquidated within the original term of the borrowing. It may also mean that you end up paying back more interest than if you had arranged such a loan without a capital repayment holiday.
With so many lenders providing such an option you may wish to shop around to try to obtain a competitive deal. Too many business owners look no further than who they maintain their business current account with when in fact they could check to see what the other high street lenders are offering or indeed speak with a number of specialist business lenders.
Here at Commercial Mortgage Link, we are pleased to inform you that we can put you in touch with an experienced business lending broker who has an extensive panel of lenders at their disposal. They will be able to discuss your requirements in great detail and help tailor- make a lending proposition that can be submitted to the most suitable lender for their consideration. We look forward to being of assistance to you and your business whether it is now or in the coming months.