What is the interest rate for a business loan?
You need to decide on a couple of things before you can calculate your answer. What are you buying with the loan? Fixed assets, like tills, coolers, stoves, furniture and computers have a depreciation over 3-5 years and therefore can be said to require medium term loan finance. It is unlikely you will have anything financed over a longer period than this in a cafe that you lease. Items like the advertising, lease/rent, napkins, food, wages etc are short term liabilities and would need to be paid for out of profits or from an overdraft until you get your income/profit working. Overdrafts can be an expensive way of financing a business with interest rates always higher than both medium and long term loan (debt) finance. The interest rate will be calculated on how much you will be borrowing for how long and at what rate (generally the longer you go the higher the total cost but the lower the monthly repayments). The amount of security and it’s liquidity (cash value) you can offer will red
