6 Steps to Choosing the Right Small Business Loan
There are many reasons why small businesses take out loans. Borrowed capital can be used to invest in an expansion opportunity, offset inventory costs, improve cash flow, purchase equipment and build credit for the future. When used properly, the right loan will help to keep your business afloat and improve your bottom line. However, considering the numerous funding options available on the market, choosing the right small business loan can be challenging. So what should you focus on when choosing a financial solution for your business?
Read on to learn more.
DECIDE EXACTLY WHY YOU NEED A LOAN
Nailing down what exactly you will use the money on will help you borrow wisely. Before you begin your research, you should assess your current needs and set clear goals. This will enable you to not only identify the type of loan you need but also figure out how much you require. In the end, you will choose a loan that is likely to suit your needs and one that you can afford comfortably.
EVALUATE YOUR BUSINESS
The next step will be to determine whether your business meets certain loan requirements. Most lenders will consider issues like how long you have been in business, your creditworthiness, how much collateral you have to put up for the loan, your cash flow, your debt load and the industry you operate in. These factors will affect your chances for loan approval and influence the kind of loan you can get.
EXPLORE YOUR OPTIONS
You will want to choose a financial solution that will meet your exact needs and help you achieve your goals. When it comes to small business loans, the options available include business cash advance, invoice factoring, short-term business loans, business line of credit, equipment financing, SBA loans and long-term business loans. To choose the best option for your business, you need to understand how each loan works. MobyCap has experienced business funding experts who can help you choose the right loan option for your business.
Part of choosing the best loan product also involves finding the right small business lender. When comparing various lenders, take time to look at their loan offerings, flexibility and customer service.
CONSIDER THE INTEREST RATES
The interest rate on a loan affects the cost of borrowing. High interest rates make loans more expensive. When shopping around for a loan, the interest rate will help you determine how much you will be paying back each month. This will allow you to decide whether you can afford the loan, effectively helping you to reduce your risks. You should compare the interest rates charged by different lenders on their products before choosing the right loan for your needs.
LOOK AT THE REPAYMENT TERMS
Looking at the repayment terms will go a long way in helping you make smart financial decisions. Make sure you find out how long the loan term is and what the payment schedule looks like. You should also ask if you can pay off the loan early or whether you have to wait until loan maturity. A good loan will have flexible payment options, allowing you to choose what works for you depending on your cash flow.
ASK ABOUT APPLICATION FEES
Loan requirements vary widely from one lender to another. Some lenders will require you to pay a fee when submitting your application while others will not. To know the actual cost of borrowing, you should ask whether there are any fees associated with the application. It is also important to find out the types of fees charged if any. This will help you choose the best small business loan. MobyCap will let you know ahead of time if there are any application fees involved, so you can make an informed decision.
At MobyCap, we provide fast, easy business funding of up to $5M to help companies meet their goals. Our experienced and dedicated team will seek to understand your needs and develop customized funding options for you. This will ensure you enjoy competitive rates and terms on the loans. Call (737) 577-1180 or email firstname.lastname@example.org to discuss how we can help you grow your business.