In Switzerland, business loans are offered by both banks and other lending institutions. Banks are normally more conservative in their granting of business loans than online lenders like Lendico, Creditworld and CreditGate24. But even alternative lenders will not accept your loan application unless you meet numerous criteria.
While getting your business into a position which makes it attractive to lenders is key to getting a business loan, it is only a first step. Finding an affordable loan is almost as important. The differences in the prices you pay for loans can be significant. As a general rule, the better the creditworthiness of a business, the less that business will pay for a business loan.
Interest rates on Swiss business loans compared
The interest rates of business loans vary broadly between lenders and depending on the financial situation of the business looking to obtain the loan.
Businesses with excellent creditworthiness can get business loans with rates as low as 1% to 1.5% interest per annum. Business with poor creditworthiness can pay as much as 15% in interest every year. Unlike personal loans which are regulated by Swiss consumer credit laws, there is no limit on the amount of interest which can be charged for business loans.
Each lender has its own set of interest rates which it applies to borrowers based on their creditworthiness. In addition to creditworthiness, other criteria like your industry sector, the loan term and the size of the loan can all affect the interest rates you get. The business loan comparison on moneyland.ch shows guide interest rates (the lowest and highest possible rates) based on your business profile.
Major differences in service fees charged
Many businesses do not know that in addition to annual interest rates, business loans normally come with a number of other costs. Here again, they differ from personal loans which must include all fees in the given effective annual interest rates. Administrative fees are among the most prominent of the additional costs of business loans.
Depending on the lender and the creditworthiness of the business, administrative fees can add another 1% to 4.5% to the cost of a loan. Some lenders only charge a one-off administrative fee, while other charge annual fees.
Because fees can add substantially to the cost of a business loan, it is important to compare all relevant costs to find the most affordable loan for your needs. The unbiased business loan comparison on moneyland.ch accounts for all fees in addition to interest rates.
Amortizing or non-amortizing?
Some lenders only offer amortizing loans, while other lenders primarily offer non-amortizing business loans. In the case of amortizing business loans, the loan principal is paid of in regular installments as with personal loans.
The business loan comparison clearly indicates whether loans are amortizing or non-amortizing, as this directly impacts costs. Carefully consider which type of loan would best suit your business. Some lenders let you choose whether or not you want to amortize your loan, and when this is the case you should calculate both scenarios. The costs, terms and conditions for both options are normally different for amortizing and non-amortizing loan versions.
Because costs may be arranged in many different ways, negotiating your loan as you would a mortgage can pay off. Interest rates and fees are not always set in stone, and asking whether the lender could improve on their offer certainly won’t hurt – although you may not always be granted a discount.
Getting quotes from multiple lenders can help provide you with a solid basis on which to compare loans. Different lenders may also have different views on the financial state of your business, and the difference in the way they judge your creditworthiness will be reflected in the offers they make.