Are you currently in the process of creating a small business? Do you need a bit more financial backing to create manageable growth? If so, then you need a business loan to help you out.
More importantly, you need to find the right one. There are several crucial factors to consider when selecting a business loan. Doing so can help you ensure that you get the money you need without any drawbacks.
See below for an in-depth guide on how to select a business loan. This will help you sort through everything from finding the right provider to avoiding costly fees.
1. Positive Client Feedback
First things first, let’s take a look at the provider. If you want to line your business up with a credible loan, you need to look no further than the company that’s offering you the lump sum.
Before agreeing to a loan with a provider, you’ll want to do a bit of homework on them. Believe it or not, you can ensure either a delightful or negative experience for yourself by simply looking for feedback from their previous clients.
There are three great ways to do that: scan through online reviews, ask for client references from the company, or read customer testimonials.
The first method is generally the most helpful. Unlike the other two, clients aren’t providing biased feedback. They’ll mention all of the good, the bad, and the ugly about the providers that you’re considering.
Ask yourself a few questions while you read through the provider’s online reviews:
- Do clients seem satisfied with the rates that they received?
- Are they happy with the customer service that the provider offers?
- How much did other clients take a loan for through this provider?
- Are there any consistently negative aspects of the provider that clients mention more than once?
2. Your Goals
The goals that you have for your business (both long-term and short-term) play a huge role in the business loan that you seek.
If you haven’t already, take some time to lay out a few concrete goals for you and your company to achieve. This can help you either gain momentum during a startup, as well as hit the reset button on your current business.
Are you hoping to create a business that you can build up and then sell to an investor? Do you have a business model that you’re hoping to branch out to in different cities?
Whatever your goals are, your business loan should reflect them. Investors and loan providers love a businessman/businesswoman with a plan! It shows direction and focus, two of the most important features of an entrepreneur.
This can also help you figure out the perfect loan amount. Once you have a concrete plan for your business, you can begin the process of laying out financial projections.
For example, let’s say that you need a business loan to start a moving company. You can find different ways to use the same packing materials to cut costs, thus lowering the loan amount that you require.
3. Pay Attention to the Details
We all have the same reaction when something seems too good to be true: What’s the catch?
Fortunately, there are legitimate business loans out there to be had. You just need to pay attention to the details to find them. Be sure to factor in things such as:
- Funding Amount
- Funding Speed
- Repayment Terms
- Reputation & more
The details will tell the story. But don’t worry, you won’t need to scour the internet to find a credible loan opportunity.
You can get matched through Nav to find a small business loan with customer-friendly financing options. No gimmicks. No drawbacks.
Nav can help you sort out the best options out there, then filter them down to find a provider that’s a match made in heaven for your business. It can save you time and get you the money you need right away!
4. Your Situation
Entrepreneurs come from many different walks of life. The beauty of it is that you can build a business from scratch, regardless of your background or past successes/failures.
That said, your situation will play a part in the business loans that you should be expecting. Things such as your credit score, experience level, and revenue will dictate the amount that providers are willing to lend you.
Wise entrepreneurs and business owners make themselves aware of these details early on. That way, you’re searching for realistic business loans for your situation and can seize the opportunity when one is offered to you.
5. Repayment Terms
This is obviously a huge factor in finding a business loan. You want to set yourself and your company up for success and part of that is finding a loan with reasonable repayment terms.
Be sure to look into things such as the interest rates, the loan term, any potential penalties, and so forth.
It never hurts to have one of your mentors read over the terms of the business loan that you’re considering. Having an outsider’s perspective will ensure you’re making the right decision.
Selecting a Business Loan: Focus on the Provider
As you can see from this article, it’s important to find the right provider when selecting a business loan for your company.
Take the time to assess your situation. How much do you need in the business loan you’re applying for? What are your projections? Are there other ways you can get the funding that you need?
Be sure to browse our website for more articles on getting business loans, as well as many other topics you’ll enjoy.