Guide: Collecting loans for businesses

Benefits of pooling business loans

1. Simplifying finances
   By pooling loans, the company can move from managing multiple monthly payments to a single payment. This can make it easier to keep track of company debts and improve cash flow.
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2. Sometimes you can get a lower interest rate - in the short term!
   If your company has several loans with different interest rates, it may be possible to lower the average interest rate by combining them into a single loan. This can lead to lower overall interest costs over a period of time.
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3. Better liquidity - right now?
   By renegotiating the terms of a larger loan, companies can often extend the maturity, reducing monthly payments and freeing up capital to be used in the business.

Disadvantages to consider

1. Higher costs in the long run
   Although the monthly payments may be lower, an extended loan term may mean you pay more in interest overall. It is important to look at the big picture before deciding to pool loans.
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2. Difficulties in renegotiating
   If the company's creditworthiness has deteriorated since the first loans were taken, it may be difficult to get better terms for a new loan. This may lead to a less favorable solution.
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3. Fees and costs
   In some cases, there may be fees associated with redeeming existing loans or applying for new loans. These costs should be taken into account when considering bundling business loans.

Many streams small, eventually turn into a large river. 

An old classic proverb that is often mentioned in connection with economics. In this particular context, it is in a negative sense, as many small loans often come at a great cost. 

Annuity loans a risk factor

It is very common for companies that offer to collect their loans to do so through so-called annuity loans. This means that you initially pay more interest and less installment (amortization). In this way, it takes longer to repay the loan and the total cost is therefore higher. 

Straight amortization is simple and often economically advantageous

In the case of a straight repayment, you pay off the loan all the time, you amortize the same amount all the time and thus get rid of the loan faster. Especially if the loan has a fixed monthly fee where you pay both the interest or the fee for the loan each month, while amortizing. 

Financing investments  

Drawing up a cash-flow budget gives you a clear overview of your financial situation. This will help you decide which financing option is best suited to your investment - whether it is most beneficial to use your own funds, take out a loan, or lease equipment.

Collect your financing with Qred Bank

It can often be good to gather your financing solutions in one place, such as with us at Qred Bank, where you can get both a business loan for your slightly more short-term needs (up to 36 months) and a Qred VISA business card for your everyday purchases and expenses. Qred helps you with a personalized overall solution for you and your business. Whether you have previous credit, we want to help you find the right type of financing.

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