Business Loans

How much can I Borrow for a Business Loan?

So, you want to start your own business but are low on start up capital?

Welcome to the club.

Even though almost seven out of ten entrepreneurs start their business out of their own homes, there are still significant expenses to startup any new business. The main questions on the mind of every potential small business owner are: “how much do I need and how much can I get?”

While getting a multi-million dollar loan to purchase an entire factory might be nice, there are huge amounts of risk associated with starting a small business. Furthermore, if you have a bad credit history, your financing options will most likely be limited, though not impossible.

While the actual amount of money needed to start a business of your own will depend on a number of context-related factors, there are certain steps along the planning process that every potential small business owner would do well to follow.

Start Small

While dreaming big certainly has its merits, when starting a business of your own it is usually best to start small. Limiting the amount of debt burden can help improve your immediate cash flow while also helping you determine the real financial possibilities of your business venture and potential opportunities for growth.

A simple business loan calculator can help you gauge different loan repayment and amortisation schedules depending on how much you plan to loan from the bank. This will subsequently allow you to calculate mid to long-range financial plans for your business. Furthermore, this business loan calculator allows you to estimate your possible business loan repayments and also determine potential savings through extra repayment options.

Determine the Type of Loan You Need

Lastly, it is also important to determine what type of business loan you need in order to calculate the amount to request from the bank. Starting a business from scratch will most likely require a long-term repayment plan. If, however your business needs a short-term loan in order to finance payment for goods in transit, a trade finance loan might allow you to save on interest costs through applying for a shorter term loan. Determining the best finance instrument for your business´s particular needs is an important strategy to help you save money on the potential interest payments.

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