Finance business purchases and cover unforeseen expenses with a Line of Credit you can repay in lump-sum amounts.BOQ Business Line of Credit is a drawdown facility that can be used for any business-related purchase. You can apply for a limit starting from $50,000 and have full access to it through ATM transactions and Internet banking. You have the option to secure the loan with residential property for a maximum term of 25 years.
This loan product can be bundled with an Everyday Business or Everyday Management Account in the BOQ Business First lending Package. Certain fee and interest rate discounts come with this account.
How does the BOQ Business Line of Credit work?
When you apply, your personal and company information will be assessed and, if approved, a Line of Credit will be opened starting at $50,000. Repayments are interest-only with a variable interest rate of 7.4% p.a. if the loan is secured with residential property, and 8% p.a. if other security is used.
If you borrow against residential property, BOQ will approve a maximum of 80% of the property value (70% for non-residential property). A fee is charged for lump-sum payments.
Features of the BOQ Business Line of Credit
Here are some of the features of the BOQ Business Line of Credit:
- Variable interest rate. This loan comes with a variable interest, which is paid monthly and in arrears. The base rate is 7.4% p.a. with residential property as security. An interest rate of 8% p.a. applies with non-residential security. Margins may apply in both cases.
- Lump-sum repayments. You can make additional lump-sum payments for a fee. If you're making additional payments by cheque, a fee of $5 per cheque applies after the first five payments.
- Access. This loan can be accessed by ATM transactions and Internet banking.
- Monthly fee. This loan type implies a monthly fee of $25.
- Loan term. The minimum loan term is 1 year , with a minimum loan amount of $50,000. If you have residential property as security for the loan, you can repay over a maximum of 25 years. Loans granted with non-residential security can be repaid over a maximum of 15 years.
- Option to bundle. The Business Line of Credit can be bundled with a business transaction account in the BOQ Business First lending Package.
How much does the loan cost?
These are some of the fees associated with this loan type:
- Establishment fee. A fee equal to 0.75% of the approved credit limit is charged for setting up the loan.
- Transaction fee. After the first 10 transactions, you are charged $5 for all deposits and withdrawals.
- Monthly service fee. An ongoing monthly fee of $25 is charged as a service fee.
- Break-cost fee. This fee is charged when you settle the loan amount before the end of the loan term, or when you make additional repayments in any 12-month period during the loan term.
- Additional security fee. If BOQ requires additional security for your business loan, you are charged a fee of $150.
- Security release fee. If you request that one of your securities be released, a fee of $150 applies.
- Settlement fee. A fee of $150 is charged when you settle the outstanding loan amount.
How to apply for the Business Line of Credit
Applying for a BOQ Business Line of Credit is simple. When you start the application you'll be asked to submit information about personal and company finances, after which BOQ will assess your situation and decide whether or not to approve your application. You have the option to open a joint account.
New BOQ customers will be asked to provide the following information about the loan:
- Whether or not the loan will be held by a trust
- Details of all signatories and partners
- Financial information including assets, liabilities and existing loans and credit
Other required documents include:
- A current Australian driver's licence
- A valid Australian passport
- A tax file number (optional)
A Line of Credit isn't a bottomless pit of money, so it's important to be responsible about how you use it. If you're not sure that your business can afford a Line of Credit, it's a good idea to explore other loan options with more suitable criteria and terms.