Exit Strategy FAQs
What is a loan exit strategy?
A loan exit strategy is the plan to successfully exit the loan. This could be through refinancing your loan, paying it out in line with the loan schedule or paying your loan out
early.
What happens to businesses without a loan exit strategy?
Business owners who take out term loans without a specific exit strategy in mind often face hardship in an economic downturn or if they’re faced with a cashflow challenge. This can lead to taking out more debt as a stop gap solution, often at higher rates of interest and shorter loan terms if their credit has been downgraded. More expensive loans that are paid back over shorter and shorter periods of time can place even more pressure on cashflow – business owners in this circumstance often find themselves missing payments, not meeting their ATO obligations and other hardships that place further strain on business. Businesses that cannot meet their loan obligations, their ATO and other creditor obligations can be faced with court judgements and if found to be insolvent can be wound up.
What is the benefit of an exit strategy that pays out a loan early?
Many loans offer discounts on interest if your exit strategy is to pay out your loan early. Not all business loan providers offer discounted interest for early payouts or making additional payments. If you’re intending to pay out your loan early make sure your lender offers a discount for doing so and won’t charge the entire scheduled interest.
Is debt consolidation a good loan exit strategy?
Debt consolidation can be a good loan exit strategy if you’re struggling to keep up with multiple loan repayments that are scheduled at different times because most people find one payment easier to manage. It’s important your debt consolidation loan has a competitive rate and allows the option for extra repayments to be made when you can to help you pay your loan off faster.
Unsecured and Secured Business Loans Across Australia
Dark Horse Financial offers secured and unsecured business funding services across Australia, each tailored to specific needs and risk preferences. Unsecured business funding offers the flexibility of borrowing without collateral, allowing businesses to access funds fast. Secured loans leverage assets as collateral, often leading to lower interest rates and larger borrowing limits.
With these options available nationwide, including unsecured business loans Melbourne, unsecured business loans Sydney, unsecured business loans Sydney, with also unsecured business loans available across Australia.
