Top 5 Factors to Consider When Picking Business Loan Providers
In 2019, small business owners in America borrowed $645 billion; that’s a lot of business loans! Many businesses need a loan at some point, whether they use the money to start something new or expand something profitable.
Applying for a business loan is complicated enough, but it’s only half the battle. First, you have to examine your loan provider options and choose one that fits your needs.
Picking business loan providers is a big decision. Loans can take a long time to repay, so you need to find a provider you can work with for a long time.
There are a few tricks that can help narrow the field of possible loan providers. Read on to learn everything you need to know!
1. Reputation
Above all else, you need to know you can trust your loan provider. If you can’t trust them, you definitely shouldn’t take a loan from them! The first thing you should check about a provider is their reputation.
Reading online reviews is a simple way to do this. Online reviews give you access to the experiences of former customers; after reading a few, you should have a solid grasp of a company’s reputation.
2. Lending Fees
Loans provide you with the money you need, but they aren’t cheap. There are numerous costs associated with loans, from down payments to lender fees. Before choosing a loan provider, clarify their fees.
Underwriting fees, origination fees, and more can up the overall cost of your loan. Comparing loan costs can save you a lot of money in the long run.
3. Conditions of the Loan
Loan terms and conditions will vary depending on the loan provider and the loan’s purpose. Terms dictate a loan’s repayment period, the size of your payment installments, interest rates, and the fees mentioned above.
Make sure you understand the terms of a loan before signing it; look at the agreement carefully and ask questions as needed. An honest provider should have no trouble clarifying any confusion.
4. Repayment Plans
This is somewhat related to your loan’s terms and conditions, but it’s particularly important: how large are your payments going to be? If a loan’s monthly payment is too high, the loan won’t do you any good.
Carefully consider your finances and average income to determine what you’re comfortable paying each month. Then, work with a provider like Union State Bank to find a loan within your budget.
5. Customer Service
In most cases, repaying a loan takes a long time. Loans for businesses can take years to pay off, so you’ll be working with your provider for quite a while; are they someone you’re comfortable interacting with regularly?
If your potential provider has poor customer service, that’s a major red flag. The last thing you want is to deal with terrible service month after month for the next few years.
Picking Business Loan Providers Made Easy
Picking business loan providers can be difficult, but you can simplify things by following the advice above. Once you have a comprehensive understanding of your prospective provider (and the loan itself), the decision will be easier.
Once you’ve secured a loan, what’s next for your company? Visit our business blog for advice on how to boost your sales, drive customer engagement, and otherwise improve your business!
