Wednesday, 31st May 2017 | Small business financing Canada,Business loans for bad credit
How to choose a term loan provider
If you’re a small-business owner, and one looking to apply for a term loan, you’ve likely seen a rise in online lenders, coupled with what banks already have to offer. In this crowded marketplace, do you know how to choose a provider, and a trustworthy one? It may be tempting to sign with the first vendor that pops up in your online search, but taking out a loan is a serious business transaction.
If you’re a small-business owner, and one looking to apply for a term loan, you’ve likely seen a rise in online lenders, coupled with what banks already have to offer. In this crowded marketplace, do you know how to choose a provider, and a trustworthy one? It may be tempting to sign with the first vendor that pops up in your online search, but taking out a loan is a serious business transaction. Also, agreeing to the terms of a loan that you don’t understand can do more harm to your business than good. Below are some steps you can take to ensure you sign on with a reputable lender that has your business’ best interests in mind.
Evaluate your financial needs
If you think you require a term loan for your small business, take some time to evaluate your needs. Perhaps you are just starting out, planning for growth or making large investments; these all demand money. But what form is best? Small-business loans and lines of credit are two options you might consider. What’s the difference between the two? Educate yourself on the basics of loans and what the market has to offer before you even consider a lender. Often, a term loan is perfect for businesses that need a quick turnaround without the commitment of a long-term loan or large monthly payments. Once you’ve taken time to understand your needs and the type of term loan that suits your situation, it’s time to evaluate the lenders.
Look into Better Business Bureau ratings
The Better Business Bureau publicizes ratings on companies, including financing firms. Look into your preferred lenders and see how they stack up. If you see an “A” rating, you know you’re dealing with a reputable company. Anything less should be considered with caution. Further, find out if the lender is part of any financing groups related to your needs, and determine if they are recognized nationally by any industry awards or financial magazines.
Determine how flexible each lender is
It’s well known that banks aren’t the most flexible when it comes to loans. They typically expect their clients to have amazing credit, lots of collateral and a long-standing business history. Ideally, the lender you work with should offer some level of flexibility to make your lending process seamless.
Perform background research
Consider speaking with your business network that may have used alternative lenders for their own financing. What was their experience like with each lender? You can also find online reviews of various lenders to get additional insight. Since everyone’s financial needs are unique, you’re bound to uncover a variety of perspectives. Use your discretion as to how you can apply this insight to your own business needs.
Make customer service a priority
Like any company you do business with, one of the most important aspects you’ll want to consider is their commitment to customer service. Ideally, your preferred lender should make themselves easily available through a variety of channels such as phone, email live chat and more. Their staff should present themselves as being highly knowledgeable, friendly and professional. Financing is oftentimes a stressful process; ensure your lender is patient, helpful and treats you with the courtesy you’d extend to your own clients.
Ultimately, it may seem daunting to sift through all the lenders available to you before settling on just one. Following the suggestions above, you can help yourself take the guesswork out of choosing the best lender for your business and financial needs. As a small-business owner, you may not be a financing expert yourself, but the new landscape of lending does require that you do your homework.
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