Think you need a loan for your business? Click here to find out 5 things you should consider when choosing a lender.
Believe it or not, the vast majority of companies will require loans of some fashion or another at some point in their existence. When doing this there are a lot of things that should be taken into consideration to make sure that the lender company chosen is reputable and you get the best interest rates available. Here are 5 things to take into consideration.
Rates
Probably the first thing that will be taken into consideration when you are looking for business funding is the rates. There are lots of different rates available to companies which are based on the lender, the company credit history but also the term of the loan. The longer the term of the loan, the higher the APR rate is normally given and the higher the amount sometimes the APR rate can reduce slightly. Lending companies will also look very closely at the reasoning as to why a company is looking for a loan but also their credit history to make sure they understand and manage any risk.
Payment Breaks
Even if a company thinks they have planned effectively to ensure that the full loan can be paid back in full over the agreed terms, they may hit a temporary issue and therefore look to have short term break from payments for a month or two. A lot of the lenders offer this as part of the contracts and it could be beneficial to try and negotiate that in up front.
Pace of Payment
The number of forms and evidence you need to provide in order to get some loans can be quite stressful. If there are multiple financial stakeholders in the company, you may require to get their approval also. If you need the money in a hurry then when choosing the company you are taking the lending from, you need to understand how quickly they complete the initial processes and when and how the money will be paid to you. Some of these companies pay by cheque which again is not ideal if you are looking for quick payments as usually these take 5 working days to clear.
Company Reputation
You can do some research on the reputation of the company you are taking money from by searching the internet. The internet is probably the most powerful source to get some good customer feedback from people on what their experiences are with the lending company. It is important to not take all of this into account when making your decision as there could be some bias posts out there also.
Project Plan
When you are going off to get the lending, the lender is going to want to know that you have the ways and means to pay it back and what you want the money for. It is highly recommended that you have some type of project plan that can demonstrate what the money is for as well as evidence that you will be able to pay the monthly payment without any problems.
With these five things ticked off, you should have no issue selecting a lender. See who could help you out today!