02 Apr Your Ultimate Guide to Securing A Small Business Loan
Securing a loan for your business can be a challenge, especially, if you do not have a game plan. However, with the right approach, you can secure a loan, and build your credit score faster. And here is a lowdown of what you need to consider.
But before we dive into the meat and potatoes, let’s first look at the type of loans and which is better.
Types of Business Loans
Before applying for a loan, you need to understand the type of loans available. We have two different loan types: secured and unsecured loans.
A secured loan requires you to provide a car or a house as collateral, which the lender can reclaim if you fail to pay the loan.
On the other hand, unsecured loans do not require any collateral but are approved based on the borrower’s creditworthiness.
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Factors to Consider When Applying A Business Loan
Identify a Reliable Lender
Reliability is one of the important aspects to consider when applying for a business loan. Do an online research and check the reviews from businesses that have transacted before with the lender and what they are saying about them.
Type of Business
Financial lenders have a list of businesses they can lend money. Once you have identified a reliable lender, ensure the organization provides financial services to businesses in your industry. This will save you time and reduce any hustle of going through the application process and being turned down.
Loan Requirements
Every lender has terms and conditions you should meet as a business to qualify for a loan. Some may require you to disclose other outstanding loans or business returns, while others don’t. It is highly recommended to go for unsecured loans as they do not require you to pledge your assets.
Financial Muscles
Financial lenders have limits on the amount of money you can borrow. Consider the lender maximum limit you can borrow, and decide if it falls within your loan amount.
Approval Time
No business would wish to wait forever to get their loan approved. Financial lenders will have different loan approval times. Traditional banks tend to have longer approval rates as compared to online lenders.
Loan Terms
Consider your lender’s interest rates, and loan repayment time to help determine if your business can meet the requirements. Consider the penalty charges in case you fail to meet the repayment period.
Application Process
The loan application should be simple. Check the experience of other borrowers who have transacted with your lender before to make sure the application process is not complicated.
Wrapping Up
Securing a loan for your business shouldn’t be a challenge with the above tips. At Countrywide Financial Solutions, we offer a full line of financial solutions for businesses. We approve business loans in less than 24 hours.
