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Business Loans - Compare Business Loan Rates - Canstar


  • Residentially secured overdraft
  • Commercially secured overdraft
  • Residentially secured term loan
  • Commercially secured term loan

CANSTAR researches and rates both business loans and business overdraft facilities. We recognise that business owners have different needs and wants when it comes to credit for their business. CANSTAR’s Business Loans star ratings are aimed to provide results that suit each of the borrowing profiles for business overdrafts and business loans.

What is a business overdraft?

A business overdraft is a facility attached to a savings, debit, or checking account. An overdraft occurs when you make a transaction (ATMs, cheques, card purchases, EFTPOS, or automatic bill payments) for an amount greater than the balance in your account. The bank then extends credit up to a maximum overdraft limit and you can make withdrawals up to that limit. Interest is charged on the fluctuating daily balance, but the overdraft balance does not need to be repaid within a set timeframe.

What is a business loan?

A business loan is a loan for business purposes, which can be used for anything from upgrading equipment or software, to purchasing a new storefront, to paying employees during a temporary cash flow shortage.

Residentially Secured Overdraft

What it is: An overdraft facility secured by the home you live in. Having your overdraft secured lowers the risk to the bank, meaning they can offer you a lower interest rate.

Popularity: 43% of business owners choose to use their own home as the security for their overdraft (CANSTAR database, 2016).

Availability: 13 out of 23 institutions offer this product.

Commercially Secured Overdraft

What it is: An overdraft facility secured by real estate property owned by the

business. Having your overdraft secured lowers the risk to the bank, meaning they can offer you a lower interest rate.

Popularity: Slightly more popular. 57% of business owners choose to use their own home as the security for their overdraft (CANSTAR database, 2016).

Availability: 14 out of 23 institutions offer this product.

Residentially Secured Term Loan

What it is: A loan that must be repaid within a set period of time and is secured by the home you live in.

Popularity: 26% of business owners choose to use their own home as the security for their loan (CANSTAR database, 2016).

Availability: 14 out of 22 institutions offer this product.

Commercially Secured Term Loan

What it is: A loan that must be repaid within a set period of time and is secured by the home you live in.

Popularity: Highly popular. 74% of business owners would prefer to use commercial property as security for their loan (CANSTAR database, 2016).

Availability: 16 out of 22 institutions offer this product.

Fixed or variable interest rate?

  • Variable: 35%
  • Fixed 5-year term loan: 22%
  • Fixed 4-year term loan: 4%
  • Fixed 3-year term loan: 14%
  • Fixed 2-year term loan: 10%
  • Fixed 1-year term loan: 15%

What size of loan business owners expect to need

According to the CANSTAR database in 2016, 1 in 3 business owners expect to need a loan for more than $100k but still less than $250k. More than 1 in 10 business owners comparing loans on our site are looking for a loan of up to $1 million or more, in the “more than $750,000” category.

  • $1 – $100,000: 25%
  • $100,000 – $250,000: 33%
  • $250,000 – $500,000: 18%
  • $500,000 – $750,000: 7%
  • $750,000 or more: 15%
    (Source: canstar.com.au)


Category: Bank loan

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