The features and benefits of $10,000 business loans
With competition in the market growing constantly, you’ll be able to find options starting from the lowest rates available to help you save throughout your loan.
Business loan terms are flexible to suit your needs, so you’ll be able to repay your finance deal over as little as three months or as long as several years depending on which is better for you.
As long as it’s for business purposes, you can make use of your loan for just about any purpose you may need, making them highly flexible to any business.
The interest on your business loan repayments can be claimed as a tax deduction, potentially slashing the cost of your overall financing significantly.
Types of business loan
The most common type of business finance, unsecured loans enable businesses to access the funds they need without attaching an asset to the loan as security. Some lenders may allow you to borrow up to $500,000 and, because there's no collateral, offer same-day approval.
If your business already owns valuable assets, such as property or expensive equipment, you may choose a secured business loan instead. These loans may increase your borrowing power beyond what an unsecured loan can offer and, crucially, typically come with lower interest rates.
Business loans don't always have to be worth hundreds of thousands. If you're operating a small business and need a boost to help you keep on top of your expenses or expand your company, you may be able to take out a loan starting from as little as $5,000 and unlock further capital.
Just because you don't have all the required documents for a standard business loan doesn't mean you're out of options. Low doc finance enables you to use alternative documentation, such as other business financials, in the application process to access the funds you need.
A commercial line of credit allows you to draw from your loan account whenever your business needs access to their funds, instead of managing a lump sum and repaying it like a regular loan. This can add flexibility to your finance arrangement, providing money when you need it.
Invoice finance presents another option to business operators looking to free up cash through outstanding invoices yet to be paid by their customers. Your invoice finance can either be invoice discounting or factoring, which present different options when it comes to your invoices.
A common reason for seeking out a loan is to purchase commercial equipment. You can do this either with an unsecured arrangement or one with the equipment itself as collateral, with the latter potentially increasing your borrowing power and lowering your interest rate.
With this finance, when your business purchases product, your supplier provides an invoice which you send to your financier and pledge to repay by a set date. From there, your supplier sells the invoice to your financier at a discounted rate, while you repay the full amount to your financier.
Under an inventory finance agreement, your lender pays your supplier directly for inventory, which allows it to be signed off and sent to you. From there, you can pay off your debt within a pre-determined period to your lender, which may be longer than the regular debtor period.
An overdraft facility is attached to an existing financial account belonging to your business, such as a transaction or savings account, and enables you to borrow up to a set limit after the account’s balance reaches zero. These overdrafts are repaid with interest, but only on what you use.
You may simply be in a position where your business needs a boost to its cash flow. If this is the case, there’s a range of stop-gap solutions which may be suitable for your situation, from standard unsecured loans to specialist cash flow loans, invoice finance or even an overdraft.
Why compare business loans through Savvy?
Top tips for saving money on your $10,000 small business loan
When you compare different business loans, you can give yourself a better understanding of the costs of different loans when it comes to interest rates and fees in particular. These are two key aspects of your business loan which will form the foundation for its overall cost, so it’s important to consider as many options as possible before selecting your deal. You can save before you even sign your agreement.
If your business has leftover funds that can be dedicated to your desired purchase or covering of expenses, it might be worth your while doing so. This decreases your loan amount, essentially serving as an interest-free contribution to your finance deal. For example, a $10,000 loan repaid over 12 months at 10% p.a. would cost around $550 in interest overall. Paying $2,000 of your money and reducing this amount to $8,000 would save over $100, which can be a meaningful amount for many small businesses.
Interest is calculated daily based on your outstanding loan principal. This means that the faster your loan principal drops, the faster the cost of interest will also. As such, selecting a shorter term over which to repay your loan will cut down on the overall interest paid. For instance, a $10,000 business loan at 10% p.a. paid over six months would cost over $250 less in interest alone than the same loan over 12 months.
Following the same principle as a shorter loan term, making additional repayments across your loan will also cut down the interest you’ll be required to pay overall. This is because your loan principal will fall at a steeper rate, producing a similar result to a shorter term. Having this loan off your books sooner will help you increase your business credit rating and potentially secure better financing deals in the future.
Frequently asked business loan questions
Helpful business loan guides
Still looking for the right finance for your business?
Explore a range of business loan options suitable to your financing needs and apply online through Savvy today.