This is the penultimate post in this series where I am sharing tips with you about how to stand the best possible chance of getting your small business loan approved. In this series, I am opening up and sharing critical inside-information that I have gained from many years working within the Banking Sector and providing Business Plan Writing Services to small businesses throughout the US and beyond.
Choosing the right lender is one of the essential factors that you should consider while obtaining a loan. Whether you are planning to choose an individual private lender or a large Financial Institution, always consider their reputation, interest rates, after-sales service, repayment options, and overall fees before making your final choice.
Reputation Is EVERYTHING
Here, perhaps the most essential aspect to consider would be the reputation of your Lender. Reputed lenders with a well-established history in the market are likely to have better and safer options. You can always conduct quick online research about almost any Lender nowadays with ease.
Check their testimonials and understand their credit box to finally decide whether they truly make the cut. Not all lenders will lend on every type of request, industry, and collateral. Depending on their credit box, they may or may not be the right fit for your request. The second thing that you should consider is the current interest rate your Lender is offering. An Alternative lender, meaning a non-traditional lending institution, may be more open to certain requests (such as start-ups or Purchase Order financing) but will charge a higher interest rate for that risk. In this regard, higher the interest rate, the greater will be your cost of meeting and fulfilling the loan.
So, try to choose an option which you can really afford. After sales service is the third option that you should be considered as a key factor in your decision-making process. No matter how successful a Lender is, if they do not respond to your queries, and fail to communicate with you; then there is no point in availing of their services. I am particularly passionate about this fact, because if anything occurs and you need help, flexibility, and understanding; it is those Lenders with poor service reputations that are often the same ones who will not be able to assist you in these adverse situations. A good lender doesn’t just follow up annually after the loan to collect financials…they check in from time to time and work as an advisor for the business to help them continue to grow.
Finally, aside from considering the above aspects, you should also check the repayment options provided by the Lenders. It is often here that smaller institutions can be a better option as they offer personalized services, customized solutions and flexible terms of repayment. They also communicate frequently with you and respond to your queries as and when you need them.
Taking a loan is also about building a relationship with a Lender. Establishing a sound repayment history with a strong lending intuition will make future requests faster and easier to approve. So, if you are really looking to make the most out of it, always try considering these options before taking a loan for your business.
In the final post, I am going to explore the benefits of keeping your options open when it comes to applying to different organizations for your small business loan or funding.
If you have any comments, questions or points to add to this post, please add a comment underneath or send me an email directly at [email protected]