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These days, online business loan options may seem limitless, however there are several important questions to ask before applying for a business loan. As a small business owner, knowledge is power and it’s especially true when it comes to learning the facts so you can give your business the financial boost it needs to thrive.
The ease and convenience of getting online business loans could put a serious dent in your pocketbook and it’s completely common to be stuck paying annual interest in the triple digits.
In order to help small business owners make informed decisions when it comes to getting a business loan, especially from an online-only lender, we have created an easy-to-follow e-book. Our guide lists the top 10 questions to ask yourself and your lender before applying for a business loan.
Here’s an overview of the questions addressed in the e-book. Download the E-book to get in-depth information about why you want to ask the questions and how to use the information you gather to help you find a loan that will best support your success.
Ask yourself and your lender:
After reading our interactive guide, you’ll be able to effectively:
As we created the e-book, we were led by four general guidelines for business owners based on our 40-plus years of experience with small-business clients. Keeping these guidelines in mind as you read the e-book will help set the stage for you to make a smart business decision when getting a small business loan.
Know Your Needs
It’s best to clearly define your plans before applying for a business loan. Not only will you better serve your business, you also will impress loan officers if you can demonstrate that you know exactly where your business is going and what you need to get it there.
Know Your Lender
Online options are great for instant gratification, but for business owners there can often be hidden costs. Be aware of the varied financing offerings to small business owners from traditional lenders, like banks, mission-based lenders, like CDC Small Business Finance, versus online operations. Finding the right fit is important. Click here to learn the common predatory trends of online lenders.
Know Your Credit Score
Don’t assume your credit is considered poor! Securing favorable terms does not require perfect credit. One warning: Online firms may not even look at your credit score. But that means they’re taking on more risk and charging higher interest rates to offset it. It may be fast cash, but in the end, it’s often more money out of your pocket.
Related: 5 C’s of Credit: What Lenders Are Looking For (expert advice)
Read The Fine Print
That’s where those high rates are often listed. If something seems too good to be true, beware. Quick financing can come with steep costs, and not just in the form of rates that dwarf credit card APR’s. There also might be prepayment penalties that make it expensive for borrowers to pay off their loans ahead of schedule.