Find The Best Loan For Your Business: The Basics
Small business owners know the struggle that can possibly come with finding the best loan for your company. If you’re a business owner, you may have already attempted to go through your local bank to try to secure a loan. The result? Maybe you were hit with a big fat “not approved.”
Well, the good thing is is that there are other options and resources you out there for you. With due diligence and research, you can get a great business loan through an online lender with ease. In addition, it will probably be even better than one your bank has to offer you.
First things first: how find the absolute best loan for you and your business?
Know What You Need
Before you can find that amazing loan that will change your business, you first and foremost need to keep in mind what you and your company need. Focus on the specifics here too.
A lot of advertisements, websites, and buzz words might talk you into thinking you’re getting the best loan for your business, but are you? As the owner, you’re one of the only people who can answer that. It’s your job to carefully analyze your business plan and your current cash flow before applying.
Precisely how much money do you need to borrow? What payment types are you going to be able to afford? What is your debt to income ratio? Do you have poor credit? How much of a down payment do you have in your bank account?
All these questions will affect the type of loan you need.
Research, and the Re-Research Your Options
Obviously, a business owner does not want to rush out and apply for a loan at every lending company that catches their eye. Not only will this negatively affect your credit score, but you could end up with a very bad loan if you’re not careful.
It is important for you to comb through your options! Write down the pros and cons and services that you think might work best for you. As you find more and more options, companies, and programs, you should start to sort through the clear winners over the loans that just won’t work for you.
Clear winners will look different depending on your specific lending needs. Some things you might want to look for are transparent lenders, low interest/single-digits rates (if you can qualify), companies with great customer service, and offer a good selection of long or short term loans.
If It’s Too Good to Be True, It Is
“You can get it for as low as…” When you look at that number and it seems incredibly low, that’s because it is incredibly low. Some lending companies will advertise with a flat a number for x and y, while the rate is actually riddled with asterisks and special terms. The number you end up with isn’t actually as low as all that when it comes times to repay your loan.
The thing is, business lending is complicated. Borrowers all have different credit scores, time in business, available cash, bank statements, etc. There is not a one size fits all, so be cautious. When doing your research, you’re going to have to look at each offer with a skeptical eye.
If a business or contract seems to offer a deal that is far too go to be true compared to all the other research you’ve done, there’s probably a catch. Don’t fall for the tricks of shady companies; lenders should be transparent with you in regards to your money.
Note Additional Fees
When you’re searching for your APR, some lenders might give you murky information. If a company is only showing you an interest rate and isn’t giving any information on other fees, or won’t tell you how much you’re going to actually be paying after it all ends, watch out! Under murky waters, you also won’t be able to see if it’s the best loan, or even an acceptable loan, for your business or not.
Ask these lenders about processing fees, application fees, origination fees, and anything else that you might have to pay for. If there are too many hidden fees cropping up, you’ll most likely want to ditch that lender.
Protect Your Credit
When you go out and apply for loan after loan, you can ding your credit score.. A lot. Often companies will run a hard inquiry on your credit to see if you can be approved for their programs. Each hard inquiry can drop your credit score by up to 10 points! Additionally, having too many hard inquiries showing in your credit history hurts your chances of being approved for a loan.
This is why doing your research and knowing your business needs before you apply is important, but you can protect your credit in other ways too.
Few lenders can pre-approve you and get you the terms for a loan with just a soft inquiry alone that does not hurt your credit. This lets you know exactly what you’re approved for with no risk, commitment, or harm done to you. With that pre-approval, you can see in black and white if the loan offered is the best loan for you. So, what business offer that a risk-free pre-approval?
The best loan you can get is one that you get through TopMark Funding. We’re 100% transparent with what you’re getting from the start. And our rates are as low as you’re going to find on any of your searches. Our excellent customer service from people who have been in the game for decades is going to propel your small business to the next level.