Business Loan Rates

Factors That Affect The Business Loan Rate

Credit Profile

It is highly recommended you have a very good credit Profile because lenders do evaluate your business credit score. Your credit score has a way of determining the interest rate you receive. When you have a high credit score, you automatically receive a low business loan rate, and when you have a low credit score, you also have a high loan rate. 

Most lenders do make sure you have a minimum credit score to be able to qualify for their loan. Some lenders accept as low as a 500 credit score.

Lender Relationship

Your relationship with the lender also determines your business loan rate. Lenders have a way of reducing interest rates for applicants who have a deposit account with them and are loyal to paying their loans. 

Most times, this applies to banks and some lenders. It would help if you borrowed from the same place you’re banking because you have a high advantage compared to others.

Business Finances

Lenders will mostly consider your current and projected finance before considering a business loan at a low rate. Lenders generate information about the number of years you’ve spent in business and the annual revenue you should have accumulated. 

Also, some lenders might request you show some documentation. You’ll also need to show how you’ll use the loan proceeds to benefit your business.  All these should be carefully outlined in your business plan or proposal. 

Business Loan Fees You Should Know

When you apply for a business loan, you are charged some rates and fees. These rates and fees might seem difficult for you to comprehend. This section explains in detail the business loan rates you’re likely to be charged. They include:

Origination Fee

The origination fee is for processing your loan application, and you’re charged as a percentage of the loan amount. You’re charged between 1 to 6%. Some lenders might add this fee to your loan.

Service Fee

The service fee is for the management and the administration of your business loan. Service Dee is charged as a percentage of your payment loan. When you get your loan, you’re charged a one-time service fee.

Payment Penalty

The payment Penalty is meant for paying off your loan balance on time. Lenders who charge the payment Penalty helps you pay the interest if your remaining loan is on time.

NSF Fee

A Non-Sufficient Fund fee occurs when your lender tries to draw off some money from your account, but your bank refuses due to insufficient funds.

Business Loan Platform

Sharpshooter Funding

This platform is best for new businesses. This platform is ideal for new business owners in the Canadian market. This platform has been in operation since 2015, and they offer business loans at an interest loan as low as 5.49%—the loan terms of $300,000 for up to 60 months. 

The terms of repayment might be weekly, monthly, biweekly or monthly. Also, this platform is accredited by the Canadian lenders association.

Ondeck

The deck platform is best for established businesses. This platform is saddled with providing loans to small established businesses in Canada and the U.S. This platform has more than 100,000 customers. This lender offers great terms for every business loan they offer you.

Also, the interest rate of this platform is between 8% to 29%. When you borrow as much as $300,000, you enjoy up to 18 months of loan terms. Their terms of repaying these loans are flexible; you can choose any payment term that suits you. 

Company capital

This platform is suitable for short-term loans. Apart from this, the platform has been in operation since 20 years ago and has always served its customers right. The good thing about this platform is that they allow you to choose the payment terms that suit your budget. The application process is so simple, and it doesn’t require some special process before applying.

The interest rate of this platform is 6.87%. If you borrow as much as $100,000, you can pay back the loan between 3 to 18 months. The Canadian Lenders Association accredits this platform. 

Lending Loop

This platform is suitable for peer-to-peer loans. This platform matches individuals who want to loan them money. Although, the eligibility status is strict, and the requirements for joining are quite hard. 

The terms for repaying loans borrowed from this platform are flexible. Lastly, this platform is accredited by the Canadian Lenders Association and the Better Business Bureau. 

Merchant Growth

Merchant Growth is a platform that enables you to borrow between $5000 to $500,000. Within 24 hours of applying for this loan, you can get your funds. The finances you’re charged depend on your business cycle; you pay more when you’re busy and less when you aren’t so busy. This platform is suitable for your Canada-based business, and you must have spent six months in business before you’re eligible for it. 

Lastly, the interest rate for this business ranges between 12.99% to 39.99%.

Conclusion

A business loan is important to get your business to the next level of growth. Sometimes when you get a business loan, it might be difficult to understand the fees you’re charged. This article has explained in detail the business loans available and other rates attached to your business loan. 

However, you can get a business loan at a favorable rate by simply taking note of your credit score. Your credit score can make or mar any loan you intend to acquire.