Are you thinking about taking out a business loan, but you’re toing and froing with what decision to make?
In a recent study published on November 26, 2021, by L. Granwal, business loans for lease finance in Australia amounted to 7.64 billion Australian dollars as of September 2021. The total value of this form of funding in 2020 was more than 10 billion Australian dollars during the year.
The number goes to show that the trend of acquiring business loans among Australian businesses is gaining traction.
“Although you can use a personal loan to support your business endeavors, business loans are developed specifically for business purposes. As a result, they give a number of advantages that personal loan has not, such as tax deductions and reduced interest rates,” emphasised Shane Perry, startup business lender from Max Funding.
If these arguments aren’t enough to help you make up your mind, here are seven startup business loan benefits you might not know about to help you decide.
1. You May Borrow A Large Sum Of Money For Large Business Ventures
Unlike personal borrowing, a startup business loan permits you to take out loans in millions of dollars, often limited to $50,000 or less. A startup business loan is beneficial if you’re financing a large-scale business initiative, such as expanding into new markets, constructing new facilities, or massive technical improvements.
2. You Are In Complete Control Of The Funds You Borrow
Your lender will not dictate to you what to do with the money. They may request your business plan to understand better how you plan to manage your business, yet they will have no say in the decision-making process after you have received the funding. You may spend all that money as you choose, provided you’re committed to paying it back with interest.
3. Interest Rates Are Generally Minimal
Many business loans have low-interest rates to entice consumers. Although lenders want to make a good profit on their loans, there is intense competition in the financial sector, making it easier for borrowers to find the best prices.
4. You Will Be Eligible For A Tax Deduction
A business loan’s interest is tax-deductible. The interest on the following items is included in these deductions:
- Unpaid business debts as of June 30
- Private loans and personal credit cards used to support business projects could be deducted from your individual income tax filing if you used them for business reasons.
5. You Won’t Have To Pay Back The Loan If Your Business Fails
If your business takes out a loan then fails, you will not be required to return the money. Instead, your company is liquidated, which implies that its assets are sold to repay all or a part of the entire amount borrowed. In the case of a debt default, this guarantees that your company will be the only one to go bankrupt, not you as the business’s owner.
6. You Won’t Have To Put Up Any Security
Many financial institutions can provide company funding without any security as long as the business proposal is viable. Lenders often appraise larger enterprises on their earnings, cash flow, and stability to guarantee that they can pay the loan throughout the agreed-upon time frame.
7. You Will Not Be Required To Share Any Of Your Profits
Startup business loans help expand or develop your business, resulting in increased profitability and long-term success. In addition, you won’t have to share your earnings with anybody else after you’ve achieved this goal. The only thing you’re responsible for is repaying the loan plus interest, regardless of how big or little the revenues from your initiatives are.
Closing Thoughts: Apply For A Business Loan To Help Your Business
Now that you’ve learned about the positives of a startup business loan do some researching and weigh your possibilities. First, be sure to read and understand the fine print of any business loan before proceeding with it. Then devise a strategy for how you intend to repay it.
