How To Find A Great Business Loan
At my last count, there were close to 70 non-bank lenders offering an array of loans to businesses.
Some good, some bad.
So, how do you find a great business loan and how do you know that you have one?
If you are like most people you probably think it’s all about the rates – and rates are important – but there is so much more to consider.
If you buy a cheap pair of shoes and that don’t fit, your life becomes uncomfortable very quickly.
The same goes for a business loan. It must fit your business perfectly.
That sounds obvious, but you’ll be surprised how many borrowers accept unsuitable products either because they are pushed by a lender who just wants a sale, or because they are too busy to shop around.
For example, You may need money to buy a vehicle or a piece of equipment. Your first choice is probably an equipment finance loan.
What if you intend to sell the car? You might be better off with trade finance.
Maybe you’re going to offer the vehicle for rent. In that case, a mix of equipment and debtor finance might be a better option.
Are you importing the equipment? Supply chain finance might offer a better use of your hard-earned money.
A great business loan fits your business like a good pair of shoes.
Lenders always talk about their “service proposition”, but what does that mean? Do some homework online before accepting the loan.
Do customers complain about getting access to the lender or its account managers?
How quickly does the lender respond to requests for information?
You shouldn’t have to use a megaphone to get someone to listen when you have a problem.
Paperwork should be minimal and encourage lightning fast decisions.
Access to your information, your account, your transactions and fees should be available to you with the click of a mouse.
A great business loan is one where communication between you and the lender is always clear and transparent.
It should be easy to quit a loan. As simple as: “Here’s your money back. Goodbye”. Some lenders don’t like that.
They want to put restrictions on you or gouge some extra cash from you.
Before accepting an offer, find out how easy it is to escape the loan.
It’s not a marriage, you shouldn’t have to endure a painful divorce.
A great business loan allows you to walk away on your terms.
Your lender should be able to cope with changes to your business which effect your loan.
Need a top up? Simple.
Grow with your business? Done.
Second facility? Tick.
A great loan should be as flexible as your yoga instructor.
Business lenders are not subject to the same scrutiny as home loan lenders and can be a little more “creative” when it comes to pricing their products.
Some will lure you in the door with a headline rate that won’t necessarily represent the real cost of the loan.
Hidden fees can add hundreds of dollars to its price.
How much should you pay?
A great business loan will be priced to help your business grow and earn way more for you than it costs.
Tick that box and all the other boxes discussed above and you will have found the loan you are looking for.