Commercial Loans - Questions You Need to ask

Find out what questions to ask before you take out a commercial loan

Anybody in business will tell you that running a company is not without its challenges. Whether you’re just starting out or looking to expand your current operations, sourcing finance can prove to be an uphill struggle. Moments of uncertainty and seemingly insurmountable financial mountains can turn just about anyone grey and have you reconsidering your venture.

The good news is that this doesn’t need to be the case. A commercial loan may be a viable solution to your financing problems that stand between you and achieving your business’s goals. Read on to find out what you should consider before taking the leap.

The definition

A commercial loan is a funding arrangement between a business and a financial institution. It enables a business owner to cover expenses or expand operations that they would not be able to without financial assistance.

Questions to ask yourself

What paperwork do you need?

Preparation is key. Call the lender before applying to make sure you are aware of the documents that will be required. These documents can be critical in backing up your request for a loan and addressing questions about your finances, business model and plans.

How much do you need to borrow?

This is not an easy one to answer because the line between need and want is often blurred. Establish the exact amount you need and how it is going to be spent to improve your business.

What do you need it for?

What you need the loan for will determine the most suitable loan for you. Just as the end needs to justify the means, so the solution must match the problem – use this as a rule of thumb. For example, getting a working capital loan would not be appropriate for the purchase of equipment or property.

Will the money help my business grow?

This can be the equivalent of comparing the purchase of a house versus a car using a personal loan. Though both are important, only one will realistically generate more value. Commercial loans should be treated the same, with preference being given to a commercial loan that is used to generate additional revenue for your business.

Questions to ask your lender

You’ve grilled yourself and still concluded you need a commercial loan. Here are a few things you need to ask your lender before signing on the dotted line

Will reports be required?

In many cases, your lender will ask for financial reports also known accountants figures or profit and loss as this will give a lender a snapshot of how well your business is performing. These reports provide insights as to whether you can continue to meet your obligations for repayment. Make sure to enquire what reports will be required and what the consequences of below par reporting will be.

How much collateral is there?

If you do opt for a commercial loan, lenders will look at all types of security. Plant, equipment, motor vehicles, receivables, or property (usually as a last resort).

Does the loan have a prepayment penalty?

This does sound counter intuitive but lenders can levy a penalty for early repayment on loans. You may reach a situation whereby you can repay your loan early, but this doesn’t mean it will happen without an additional cost. When you pay off a loan early, the lender doesn’t get all the interest they would otherwise have received. In order to secure some of the profit they would have made on your monthly payments they charge a prepayment penalty.

Commercial loans, when secured, can secure your company’s expansion, increase your cash flow, refinance an existing loan, help you purchase inventory, hire more staff or simply help build your business’ credit for the future.

Through Yes Loans, business car finance, business equipment finance as well as a host of other finance solutions can be accessed, subject to assessment. With our fast approval times, you will want to contact us today and find out what we can do for you and the future of your business.

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Our clients say
our clients say
  • "Thank you for all your help with processing the loan and keeping me up-to-date on the progress. We have utilised ‘Yes Loans’ twice and are completely amazed with the process and ease that you present to your customers. **It has been a delight dealing with yourself and ‘Yes Loans’ and will not hesitate to recommend your business to all that I come across. **It can be quite daunting at times applying for a loan and I can tell you that your customer service skills far outweigh any company I deal with on a day to day basis."

    Adam F - April, 2015
  • "I would like to thank you again for a relatively painless process in getting the funds sorted for us, working away makes such things difficult and usually means taking time off work to organize. I will recommend Yes Loans to all that want to listen, thanks again"

    Tony K
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  • "Thanks Chris for all your help. I haven't purchased a car for a while, let alone taken out a loan. Your clear, concise information made the whole process so much easier. What's more you cared! Each step of the way you checked in with me to make sure I understood where the process was at and that I was happy with how things were moving. I have worked in the retail and service industry for decades, so I understand what should happen during any transaction. Chris and Yes Loans tick all the boxes. "

    Dean H - June 2015
  • "on behalf of my wife Hazel and myself , I would like to thank you for all your help and good advice you gave us regarding the purchase of our new car , using your company “Yes Loans” for finance. Most people will be able to tell you of a bad experience relating to car finance but ours was totally the opposite. From start to finish we were made to feel very comfortable about the whole process, and able to understand all the facts and figures. It was a surprisingly pleasant experience and did not drag on for hours. Completing all the paper work on the initial visit made things even easier, and not having to return on multiple occasions was a bonus. I would have no hesitation in recommending you and your company to any of my family or friends should they require finance for their own purchase."

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  • "Tony and all the staff at Yes Loans provided exceptional service, which led to me choosing their product over the competition. My circumstances were complicated with 2 sales falling over before the final one was made. Thanks to the keen attention to detail by Yes Loans staff, I was alerted to fraudulent activity by a seller, in time to call the deal off. Finally, Tony managed to achieve settlement in a short period of time and provide a very competitive interest rate for my dream vehicle. The communication I received from Tony and Colleagues was prompt and professional and I will not hesitate to refer them on to my family and friends."

    Gabriel - June 2015
  • 'Hi Darral I couldn't thank you enough for the whole process of sale. You went over and **beyond the call of duty** especially when we've both been playing phone tag with each other. Customer service is everything and from a previous sales and marketing manager background I could not fault you any where. I've always stuck to the rule of 10....1 person tells 10 people on there experience and those 10 people tell another 10 people and so on and so on. I'll highly recommend you to friends and family that are looking for vehicles in the future. Once again thank you. "

    Gavin J - July, 2015
  • "I picked the car up yesterday afternoon and I just wanted to say thank you so much for all the time and effort you put into helping us get it. The car is just awesome and that you put it through as a business vehicle so I can claim it come tax time makes you an absolute legend. Again, thank you very much."

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  • "We have used Yes Loans now several times for our Car finance, this being our 4th transaction that they have helped us with and every time it has been such a pleasurable experience, **very easy and smooth transaction with no hassles and quick service. ** We definitely will be back again. Thanks to Daniel for such professional and fast service."

    Maria & Rob - June 2015
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  • "Thanks very much for your help in finding me a loan. I will indeed enjoy my car! I will be sure to recommend you to anyone who asks."

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  • "Hello Steve, I’d Like to point out an exceptional employee you have working for you Nathan Hanna. From our first contact Nathan has conducted himself in a professional & highly proficient manner, I felt extremely confident with the service he provided and finding a solution to an issue with my vehicle being a grey import. Which many finance company’s don’t touch, Nathan found a financier which I’m very grateful. The whole experience has been a pleasure your company certainly raises the bar in customer service which you can’t get from other companies. Nathan is a real credit to your team. I will most definitely be recommending Nathan & your company to others."

    Mike B - Sept 2015
  • "Your service and support has been nothing but outstanding. We are so happy with our van, and we will spread the word around if we know anyone is after finance."

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  • "A big thank you to Tony Williams at Yes Loans for the **great service in the last week making my dream of having a new car a reality.** Within one week of deciding to buy a new car Tony had the finance organised and I had my new car a week later. Very professional and efficient service from Yes loans. Thanks you very much. "

    Susanne De - July, 2015
  • "Thanks for all your help. You handled everything very efficiently and professionally. Made my life and part in all this very easy. Thanks again and all the best to you."

    Tony
  • "The service provided by Yes Loans was better than any other loan institution or bank I have worked with. What they promised they delivered and it was done professionally and with a sense of urgency and customer service that few banks could match. I have been a long term customer of a bank and had numerous loans with them for houses, cars and home improvements for a period of fifteen years. Despite an excellent credit history, my last effort to get a small loan to re-finance a car took over two weeks to process. Then having approved the loan, the bank made my life difficult by asking for endless changes to paper work, pay slips and bank details because of the time they took to process the loan. In frustration, I rang Yes loans. Within 24 hours the process was all but complete. There was a minor issue with setting up a new account to handle the funds, but this was no problem. Daniel at Yes Loans patiently helped me out and made the process easy, so that the funds were able to arrive as soon as the new bank account was set up. I am grateful for the professional way in which my business was handled and have no hesitation in recommending Yes Loans to anyone in need of a loan." Thanks Grant for your feedback!

    Grant - Feb 2015
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