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Business Loans

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Business Loans

You know how the saying goes “You need to spend money to make money!”. And if you’re hoping to make money from some kind of business venture or investment, then business loans are a good option.

Any loan involving a degree of risk is going to send bankers into a spin, so business loans for things like shares, bonds and mutual funds are likely to attract a higher interest rate than some other loans, or require some other asset (eg your house) as security.

If you do use a secured loan, you need to understand that if you default on your payments, you could lose your security – ie the bank will take your house or whatever asset you used to secure the loan. So take this seriously, and don’t think of it as an easy way to get a loan and make a quick buck on the stockmarket!

The good news though is that any costs associated with funding your ‘investment’ or business are tax deductible including bank fees and charges and interest charges. The principal component of the loan repayment (ie the bit paying off the actual purchase price) isn’t tax deductible, because you are gaining value in the investment.

If you need a business or commercial loan for establishing or growing your own business, again this is considered a high risk loan and you need to be able to convince the banks that your particular business venture is a good one that is going to make a return and therefore be able to repay the loan.

You will need a thoroughly thought out Business Plan including Operating Budget, Market Assessments, profit projections and much more. This topic is waaaaay beyond the scope of this website, and if you are serious about setting up your own business then seek specialised financial and business advice.

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We are not certified financial planners or advisors. The information in this website is general information only. Always consult a licensed financial planner before making any finance or investment decision.

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