Small business loans are a common method for sourcing funds in starting or buying a business for sale. But with all business decisions taking out a loan should be done with proper planning and investigation. Before applying for a small business loan you need to have a developed business plan and determine if the business you are buying is feasible then ask yourself:
The next question is which type of small business loan would best suit your needs. This can always be discussed with your financial advisor or bank representative. Going into a small business lender with a clear business plan, and an outline of your costs will allow them to better asses what loan would best suit your business needs. Be sure to compare the loans offered, speak with your accountant and have a clear understanding of the terms before signing.
Today, we are also seeing a lot of 'vendor financing' where the individual selling the business offers a loan to be repaid based on the income of the business with interest attached. Normally a % of the business is paid upfront and the remainder in a loan repayment form. Though, this can get tricky if payments are not made as set out in the loan agreement, which has implications for the previous owner as well as the current. But it is another method to selling a business and closing the deal, sometimes with advantages to both the buyer and seller.
Infochoice – Compare small business loans available in Australia. http://www.infochoice.com.au/small-business/
Most of the major banks and lending offices have business loans that can help you borrow money. Have a look around their websites, compare what they have on offer. That way, when you go to speak with a business banker you can go armed with what the competitors are offering, and see what is the best deal they can offer. You might also want to look at what banking options they have available for business accounts.
The Australia government site also has some information regarding business loans that you may want to have a look at: http://www.business.gov.au
Be sure to check out if there are any government grants, subsidiaries or financial aids available when starting or buying a business for sale. The Australian government has set aside 20 billion dollars in funding programs for small businesses. The government is committed to entrepreneurs and building small business. Big companies are important in Australia but it is the small businesses that are the backbone of the Australian economy.
Check out this site for more information: http://www.australiangovernmentgrants.org/
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Have you taken out a business loan? Where from and how did it help your business?