Myrtle Beach, SC Business Term Loans: Planning for a Second Location

A term loan can replace several older balances with one payment on one schedule. For a gift shop in Myrtle Beach, SC carrying an equipment note, a supplier payment plan and a short-term loan, the questions are whether one longer schedule costs less each month, and what it costs in total.

Illustration only, invented figures: the shop owes $24,600 on an equipment note (22 payments of $1,245 left), $18,900 on a supplier plan (12 payments of $1,575, no interest) and $18,250 on a short-term loan (14 payments of $1,690 left). The three payments take $4,510 a month, and the payments still ahead come to $69,950. A $61,750 term loan at 10.4% over 60 months pays off all three: the payment is $1,324.19, the 60 payments total $79,451.40, and $17,701.40 of that is interest (our arithmetic).

In this invented example the monthly outflow drops by $3,185.81, yet the shop pays $9,501.40 more in total than the old payments would have cost, because the new schedule stretches to 60 months. Whether the lighter month is worth that extra is the owner’s decision, and a funding partner sets the actual rate and term.

A commercial term loan is a business loan with a fixed amount, rate and schedule, used for a defined project. A Horry County, SC sign and print shop adding a production line is one example, because the order bundles items with different lives into one request: a wide-format printer, a laminator, a vinyl cutter and two design workstations.

The machines are equipment; a dedicated circuit or new wiring for the printer is property work outside this site. Bundling the items into one term loan gives one payment, while splitting the printer into an equipment loan ties that part to the machine itself. Either way a partner reviews the whole order.

A gift shop paying suppliers has two shapes to choose from. A term loan delivers one sum and ends on a date. A line of credit stays open for draws whenever a supplier invoice arrives.

The shop can lay both against the same supplier calendar; a partner can price each.

Several types of loan can pay for office equipment, and the choice turns on how long the items will last and whether the office wants them to stand as collateral. For a Myrtle Beach, SC real estate office replacing its computers, a copier and the phone system:

• Term loan: one sum for the whole list, paid back on a fixed schedule
• Equipment financing: a loan or lease tied to the items themselves, which can serve as the collateral
• Line of credit: draws for smaller pieces bought over several months
• Copier lease: the leasing company owns the machine, and the office returns it or buys it at the end

Computers and phones can outlast a short loan, so a term that matches their working life keeps the office from paying for them after they are replaced. Network wiring and new outlets are building work outside this site.

The cash share on a term loan is set by each funding partner after its own review. One partner may ask for part of the cost in cash, another may ask for collateral, and another for neither.

Illustration only, invented figures: a Myrtle Beach, SC clothing shop replaces its point-of-sale stations, display racks and freestanding mirrors for $46,900. Putting in $6,100 of cash (13.0% of the cost) leaves $40,800 to finance; at 10.85% over 48 months the payment is $1,051.53, and the 48 payments total $50,473.44, including $9,673.44 of interest. With $11,725 of cash (25.0%), the financed $35,175 has a payment of $906.56 and $8,339.88 of interest (our arithmetic).

In the same invented case, the larger cash share takes $144.97 off each payment and $1,333.56 off the interest, in exchange for $5,625 more cash leaving the account on day one.

A business term loan works on a fixed schedule: the business receives the sum, then makes the same payment each month until the term ends. Because the balance is largest at the start, the interest slice of each payment shrinks month by month while the principal slice grows.

Illustration only, invented figures: a $96,500 package of in-room microwaves, mini-fridges and smart TVs for Horry County, SC hotels, financed at 9.85% over 72 months, has a payment of $1,780.45. The first payment holds $792.10 of interest and $988.35 of principal; the 72 payments total $128,192.40, which is $31,692.40 more than the price (our arithmetic).

Microwaves, mini-fridges and TVs are movable equipment; any renovation of the rooms themselves is building work and outside this site.

Two posts set fixed payments at two lengths: a motel shuttle van at 48 or 60 months and a second nail salon location with its stations, front-desk gear and deposit.