Here is the typical fee structure of an unsecured business loan. The fee's listed below are those you can expect to pay beyond your normal interest rate.
Initiation Fee
Most lenders will charge you a nominal initiation fee to get your facility up and running. This is generally capped, and should be independant of your loan amount.
Monthly Fee
This is a cost that some lenders will merge into your normal interest rate or cost of loan. Others will not. It generally covers the monthly processing of your loan.
Late Payment Fee
Should you get into a situation where your business falls behind on its payments, your lender might charge you a fee for late payment. This will depend on your loan contract.
Is an unsecured loan right for your business?
Here are some details which will help you decide whether an unsecured loan is a good option for your business.
Smaller Financer
Traditional Bank
Funding Amounts
R10k to R5M
R500k to R5M
Speed of Funding
As little as 24 hrs
Multiple weeks
Fee Structure
Fully transparent
Often hidden fee's
Who Qualifies
No collateral required
Needs collateral
Early Settlement Penalties
Discounts for early settlement
Often penalties for early settlement
Repayment Structure
Flexible. Pay as you earn options.
Rigid, inflexible.
Unsecured loan
Traditional bank loan
Funding amounts
R10k to R5M
R1M+
Speed of funding application
As fast as 24 hours
Weeks to months
Fee structure
Fully transparent
Often involves hidden fees
Access to funds
No collateral/security required
Collateral almost always required
Early settlement
Get discounts on early settlement
Often penalties for early repayment
Repayment structure
Flexible. Normally short term (less than 12 months)
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