Business loans are a type of funding that businesses can use to finance their operations or invest in new ventures. In New Zealand a business loan or business asset finance can be obtained from banks and non-bank lenders. They are typically paid back over a set period of time with interest.
There are many types of business loans, including term loans, lines of credit, and equipment financing. The type of loan a business chooses will depend on their specific needs and financial situation. Each business loan lender will have specific criteria an applicant must meet in order to be approved for finance.
Business asset finance, on the other hand, is a type of funding that allows businesses to purchase assets, such as equipment or vehicles, without having to pay the full cost upfront. Instead, the asset is purchased on credit and paid back over time with interest.
If your business is in a growth period or has secured a new contract and your workload will increase, asset finance is a great way to service the new work straight away. When you apply generally you may need to include a cashflow forecast to show a revenue increase and also a letter of intent or contract from your new contractor.
Asset finance can take many forms, including lease agreements, hire purchase agreements, and chattel mortgages. Each of these structures has its own advantages and disadvantages, and the best option for a particular business will depend on their specific needs and financial situation.
If you’re unsure on the steps to take when applying for a business loan or asset finance, speak with a business loan broker who can give you assistance on what is required when you apply and which lenders in New Zealand you can apply with.
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