Getting a business loan can be the next best thing you can do for your business. Paying back the loan is another story, as you need to ensure that you catch up to the repayments according to the loan terms. On the plus side, when you follow through with repayments, you get to improve your credit score. This guide will show you what to expect in loan repayments and how to repay a loan more efficiently.

How To Approach Loan Repayments

You don’t have to worry too much about how you’re going to repay a loan. Take a step back and analyse your finances. From there, you can make a strategy on how to pay them off effectively without compromising your savings. Here are some tips to get you on the right path:

  1. Set a Budget to Everything

It may sound simple, but setting up a budget can do wonders for your finances. Take a good look at your balance sheets and determine which expenses leak your cash flow. Mitigate unnecessary expenses and do away with other purchases that can be prioritised later. 

Once you’ve set a budget, you’ll know how much to loan and what type of financing to go for. Resist the temptation of loaning a larger amount than what you need, as paying it off may become more difficult. Remember to use the loan for the purpose that it is intended for, as using it for other means may get your finances out of control.

  1. Manage Your Cash Flow

Use cash flow tools to track incoming and outgoing money in your business. Cash flow tools will help you make projections on the amount of cash coming in that you can set aside for loan repayments. From here, you can determine how much is left for personal expenses and sustaining your business. 

Tracking your cash flow will help you determine whether you should postpone other purchases, slow down on restocking supplies, and do other cost-cutting activities. 

  1. Take Advantage of Seasons When Cash Flow is Good

Taking on a small business loan is better when cash flow is going strong. If you’re in a busy period in business, you’ll be able to pay off the debt more than the required monthly payments. 

If your credit score is superb, and you can show good monthly cash flow, lenders would be most likely to approve your loan application. You can also get loans at more competitive rates with your good credit history and positive business finances. 

How to Repay a Loan More Efficiently

  1. Make Bi-Weekly Payments

Bi-weekly payments will save you a lot of trouble in the long run. When you submit half of the payments every two weeks to your lender, less interest will accumulate. You will also get to pay an extra payment because 26 year yearly payments amount to one additional payment. This will shave off several months for the term of the loan. 

Do make sure to discuss this first with your lender because you might incur penalties for any extra payments.

  1. Make One Extra Payment at the End of the Year

If you can’t make bi-weekly payments, you can opt to make one extra payment per year to pay off your loan earlier. Set aside any money you get from additional profits or tax refunds. You can pat yourself at the back for following through with loan repayments as efficiently as possible.

  1. Round Up Your Payments

Rounding up payments, such as paying $400 instead of the required $360 of monthly payments, will give you the upper hand in paying a loan off. You don’t need to have a lot of extra funds to repay a loan as soon as possible, because the additional cash you inject in rounding up will accumulate. Over time, it will all add up to a significant amount, saving you money on interest and shorten the term of your loan. 

  1. Boost Your Cash Flow

Find ways to boost the cash flow coming into your business. You can sell old stocks or equipment in prices that attract more people. Any additional income should be set aside in paying your loan. Even though you might earn money in small amounts, it will soon add up to something bigger that can slash off loan repayments. 

  1. Consider Refinancing

There are local banks and credit unions which offer low-interest rates on loans. It’s an easy way to lower your payment, save in interest rates, and pay off your loan as quickly as possible. Take advantage of options that offer interest rates lower than your loan’s current rate or 0% interest. 

  1. Maintain a Good Relationship with Your Lender

If you have a good working relationship with your lender, you can negotiate an extension in case you’re late in loan repayments. You can also arrange a better repayment plan if ever you need to. 

Start Your Way to Better Financing

Bizzloans has a network of the best online lenders who offer loan terms that perfectly suit your business. Comparing loans here won’t affect your credit score. Save time and effort by getting a free quote below, and we’ll match you to the perfect financial solution. 


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Russel needed an injection of cash to pay his employees while he was waiting to be paid. We were able to have the funds in his account 48 hours after he first applied.

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Max needed funds to renovate his restaurant in NSW. He didn’t want to put his property on the line to secure a loan with the bank. We were able to get him over 100k without offering any security.

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Anna needed funds to renovate her practice in Adelaide. We were able to get her the funds she needed with only providing her business bank statements and photo ID.



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