Terms Loans as the name suggests is a form of financing, where the repayment of the loan is amortised over a specific numbers of years, not unlike a home loan.
This form of financing is available to assist in the funding of business growth or expansion, consolidation of business debts, capital and equipment purchases as well as the purchasing or development of commercial property for owner occupation or investment; essentially any worthwhile business purpose.
A term loan facility offers the flexibility of fixed or variable interest rates, with a choice of repayment options to cater for your businesses cash flow requirements.
In the past, most Lenders/financiers only allowed the repayment of term loans for periods of between 7 to 10 years. Maximum lending margins are generally assessed at 70% on the valuation of a commercial property and 80% on a residential property. There are a few financiers from our panel of lenders who will consider lending up to 80% on commercial properties, however restrictions may apply.
In recent years, the restrictive loan terms have been removed/readdressed with some financiers now providing terms as follows:
Some financiers from our panel of lenders will allow a period of interest only repayments within the overall loan terms, which is ideal to assist reduce repayments.
By structuring your loan over a longer term, a business can keep its loan repayments lower and reduce pressure on cash flow. This can be especially advantageous when considering a similar loan written through another lender that may have a maximum loan term of 10 years.
Refer also to the Commercial Bills section for another form of term loan financing.
