Finding the right small business lender
March 1, 20201.5K views0 comments
Are you looking for the best small business loans lender in your area? Has it been a struggle meeting payments, or have you received a new contract that requires more inventory? As a small business or entrepreneur have you been hesitant to seek to get a loan?
Today, small business owners and entrepreneurs have more financing options than ever before. The challenge is navigating the labyrinth of types of loans and payment options offered by big banks and business loan firms. The list of options can make choosing the right loan and the right lender for your company difficult. In addition to knowing their business, business owners need to be more experienced in determining their choices for loans.
Do your homework. Ask yourself the following questions:
1. What is the purpose of the money? Knowing the purpose of the loan is critical. You will be paying an annual percentage rate as a fee for this loan.
2. Is your goal for this loan worth the extra money you have repay?
3. How much money is needed? As mentioned before, borrowing money costs. You should consider your return on this investment or add value to the business.
Your credit score and profile
Some lenders may accept lower scores, provided other considerations like demonstrating a healthy business are in place.
Some lenders will look closely at your credit profile, and for them, your score will make a difference. For them — both your personal credit score and your business credit profile can determine if your search for a loan is successful. Showing you are working on building both a strong personal credit score and a business credit profile is very helpful.
Lenders do look at your past credit history to make judgments and decisions on what you are likely to do in the future. So establishing a good personal credit score and creating a positive business credit profile should be a business priority for those applying for a small business loan.
Start building a strong credit profile by becoming familiar with your current profile. And, if you are looking for a loan, an honest evaluation of your credit profile will help you move in the right direction.
How quickly do I need the funds?
This is an essential question. Some loan purposes do not allow the luxury of time to wait for several weeks to gain loan approval. For example, ramping up your ability to serve a new customer contract might require additional capital within the next few days, and waiting weeks for a small business loan could carry with it a cost that is too high.
Things to consider with meeting or talking with a lender:
Many small business owners leverage borrowed capital to fuel growth and fund other business initiatives. In addition to the right loan, finding the right lender can make the difference between successfully using a business loan to create value in your business; or contribute to putting your business’ viability at risk. Here are ten questions to help you determine whether or not a potential lender is a good fit for you.
Find the right lender who services your industry.
Do your research. Unfortunately, some lenders will not work in specific industries regardless of your credit record. Research the lender to see if there is a good fit.
It’s important to understand the offered loan meets the terms of the type of loan you require…short-term or long-term.
Some lenders provide only short-term or long-term loan options exclusively. Again, do your homework. Do not meet a lender who does not offer the conditions you are looking for.
The purpose of your loan will help you make this decision and is one of the reasons why you want to ask yourself this question before you get in front of a bank loan officer or an online lender.
Determine if the loan will meet your cash flow projection.
Today, the daily, weekly, and monthly periodic payments is a departure from a more traditional monthly payment approach. Nevertheless, many lenders (including online lenders) have adopted a more-frequent-than-monthly payment schedule for several reasons. Not the least of which is that it tends to smooth out the cash flow burden throughout the month rather than the traditional lumpy cash flow drain associated with a single payment every month.
More about Fund Small Biz
Fund Small Biz offers to fund small businesses, growth loans, and financing for machinery. Those funds are fast business capital that allows companies to get the funding they need without delay. These funds are generally quickly approved, and in some cases, the funds can be on the business account as soon as 48 to 72 hours after receiving a request for business capital.
Fund Small Biz incorporates nationwide small business capital, and the application process for funding is quick and easy. Moreover, unlike banks that are extremely stringent in their loan approval process, private lenders do not need a good credit score, even a poor credit score in the 500’s will work, no collateral is required, any kind of protection and no personal assurances of any kind are required either.