I’m sure you are asking “what do we mean?” Simply put, there are a lot of things buried in the fine print on a bank loan that many business owners may not realize. The low rate is always attractive at first glance, but when you start to dig in you may find some potentially unexpected facts:
Floating interest rates – often the lowest rate is variable; this can make it difficult for financial forecasting.
Elimination of lines of credit without warning – remember, you are still on the hook if the line closes. Most business owners like to keep these lines open for emergencies or intangibles that cannot be financed through other means.
Bank places blanket lien on business and all assets – this is quite common and is what gives a bank comfort for lending in the first place. However, it restricts your flexibility to use your assets in the future.
High fees for closing (1-4% of loan amount) – we only charge a minimal one-time fee for documentation.
Minimum Bank Balances – Some business owners will state they keep $10k to $20k in their checking account anyway, so what’s the difference? The difference is simple: that money belongs to you, not the bank!
Over the years, small business owners have learned the value of financing and leasing vs. using the bank for a wide variety of reasons; the biggest being flexibility and ease of use. While you may save a few dollars a month on your payment at the bank, you are often giving up a lot more than you may realize. Financing and leasing gives you the opportunity to grow your business with a competitive cost of funds without all the hassle and time you find with the banks. Let Harbour Capital show you the difference on your next purchase – you won’t be disappointed!