When you take out a business loan, interest is part of the deal—it’s the cost of accessing the capital you need. What matters is how that interest is calculated.
The latest interest rate cut in South Africa has brought the prime lending rate down to 11%, which is good news. A lower interest rate can mean lower costs, but real financial flexibility comes from more than market changes.
At Geddes, we take a broader view when structuring funding solutions. We keep rates competitive, but we also make sure the terms actually help your business move forward. When you need funding that works in your favour, Geddes is the partner that has your back.
Factors That Geddes Considers When Calculating Loan Interest Rates
Current Market Rates
The financial world operates within a system of constantly fluctuating interest rates that are influenced by various macroeconomic factors, including Reserve Bank decisions, inflation trends, and global market dynamics.
At Geddes, we keep a close watch on these shifts to offer our clients competitive rates. By aligning our interest rates with current market trends, we help our clients stay ahead of economic changes and make well-informed decisions.
Your Profit Margins
The flexibility in our interest rates also ties closely with your profit margin.
Businesses, particularly those in high-growth sectors, may find that a small variation in interest rates can significantly impact their bottom line.
At Geddes, we understand the importance of maintaining a healthy profit margin, which is why we offer rates that are adaptable based on your company’s performance and industry specifics.
We’ll ensure that our rates maximise your gains while ensuring your financial responsibilities are met. Every business is different, and that’s how we approach our financial solutions – customised and supportive.
Trade Turnaround Time
The speed at which your business generates revenue can affect the interest rates we offer.
If your cash flow is fast-moving like in retail or e-commerce, we can usually predict your stability with greater certainty. This allows us to extend lower interest rates because we have confidence in your financial rhythm.
On the other hand, if your business deals with longer sales cycles or complex processes, your rates may be a bit higher.
But no matter your business model, we’ll tailor the best possible terms that suit your cash flow needs and growth potential.
Overall Risk Associated with the Loan
Risk is unavoidable in lending, but at Geddes, we approach it with insight.
While market fluctuations can impact interest rates, Geddes considers the overall risk associated with the loan to offer more flexible and suitable terms for each client.
We take into account factors such as your creditworthiness, business history, and overall financial health to ensure that you are receiving a fair interest rate that reflects the risk.
Industry Type
Every industry comes with its own unique set of challenges and opportunities.
Different industries may experience varying levels of volatility, capital requirements, and financial demands. Geddes may tailor our loan options based on your industry type.
Whether you’re in retail, agriculture, or manufacturing, Geddes ensures that the interest rate offered is suitable for the specific financial dynamics of your sector.
This tailored approach allows your business to thrive without the burden of rigid financial terms that may not align with your industry’s needs.
Loan Amount and Term
Finally, your loan’s interest rate will depend on the size of the amount and how long you’ll take to repay. Larger loans with longer repayment plans usually carry lower rates. Funding with a shorter term could mean a slightly higher rate. Once again, our aim is to offer the right balance of amount, schedule, and rate for your circumstances.
Final Word On The Interest Rate Cut In South Africa
Note that taking the above into account, Geddes might consider offering you a monthly fixed rate of between 2-4%.
If you’ve been considering applying for a secured business loan at Geddes, but need more information around how the interest rate cut in South Africa affects our interest rates, please reach out to our team via our online contact form or email us at email us at getfunded@geddescapital.co.za and we will get back to you to discuss further.