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Consolidating Business Loans

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  • 25-03-2024 8:31am
    #1
    cbb1982
    Registered Users Posts: 88 ✭✭


    If this is not correct discussion heading please move.


    OH has small business currently has 3 business loans combined circa €75k, two monthly DD and one two annual payments currently paying €1500 per month and 2 payments of €4000 in June & October so paying circa €26,000 annually with interest circa 7% ranging 5-7 years on loans.

    I rang our Relationship manager in BOI to see if we could consolidate but as loans are up to date unable to help just advised pay back extra if able to clear asap

    My question is, is there s better way than this, is this the most expensive way to be paying back? Is there other better options? Machinery has to be updated but due to costs not in a place where he can buy brand new hence the loans.


    Any advice welcomed…



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    #2
    antoinolachtnai
    Registered Users Posts: 9,773 ✭✭✭antoinolachtnai


    The bank manager is right. You haven't explained clearly how it would be advantageous to the bank (or to your OH) to consolidate the loans.

    What is the issue here? Does he need more regular payments? Or does he need smaller payments?

    If he is paying back 26k/year on 75k at 7 percent, it would seem like he should be able to clear the whole thing in 40 months or so (just calculating it in my head). Perhaps one of the loans is coming to an end, and the others continue?

    I think the next step is to open a spreadsheet program and do a five year cashflow with all the payments marked in. Look at when the business generates cash, and see if the repayments can be evened out to make it a bit easier. Maybe an extra loan somewhere will help to even out the cashflow?

    I don't understand what you are talking about re machinery. Are you saying that he is financing with loans rather than some form of leasing which OH thinks would be more favorable?



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