Saving interest is a top priority for finance deals. Every business owner wants to access working capital and bridging finance at the best interest rate. So, in this article we would like to show you how you can always pay less interest on your business loan.
The key to saving interest is in the repayment period.
At Premier Finance we specialize in short term finance solutions up to 12 months. Short term finance interest gets calculated monthly on the outstanding capital. You pay a monthly interest rate for as long as you hold or use the capital. But the benefit is you can settle the loan at any time without early payment penalties.
To save yourself interest you should start looking at business lending differently. Instead of taking a maximum loan over 12 months, rather take what you absolutely need to use for 3 months. Use the loan facility as a transaction facility to cover you for a short period. Then once you have settled the loan you can always apply for finance again if you need it in the future.
Let’s look at what R1000 000 will cost you over different repayment periods:
R1 000 000 over 3 months = R1,107,780
R1 000 000 over 6 months = R1,167,660
R1 000 000 over 12 months = R1,337,320
As you can see the longer you hold someone else’s money the more it will cost you. You can rather make savvy financial decisions and use finance only for what you need now. That’s why it’s called bridging finance- you only want to borrow what you need to close an urgent gap. Then once your expected funds come in you can settle and save yourself thousands in interest charges.
When will bridging finance benefit your business?
Here are examples of how our current clients are using the finance facility:
- To purchase materials for projects
- Purchasing stock at discounted rates for ecommerce stores
- Turn unpaid invoices into working capital
- Take advantage of a time sensitive deal
- Work around lockdown regulations and boost marketing budget when the economy reopens.
- Cash equipment purchases
This is a fast cash solution so you can receive the funds within 3 days after providing all the documentation.
Premier finance works with a panel of financiers to deliver the best experience for our clients. By working with us you will gain additional support and guidance at no extra cost to your business.
Get in touch with us today. You can either complete our application form or contact us on 021 780 1046 for a free consultation.
We look forward to connecting with you and supporting your business finance needs.