Small Businesses Lured by Quick Money, But at What Price?

June 23, 2015 | Community Advantage

small business tips - beware online lendersWhen it comes to securing money from on line lenders – be careful what you ask for. Small business owners lured by the promise of quick money may end up paying more than they bargained for.

Loans from some online lending services are convenient, but can be costly. In exchange for a speedy approval process and quick cash in hand, online lenders charge for the privilege, with interest rates often more than consumer credit cards, as well as fees.

Small business owners are encouraged to weigh the costs for speed against potential benefits. For instance, using a quick-cash loan to buy inventory or equipment that can be converted into short-term profit might make sense. Be sure that short term profit can cover the loan amount. But using high-priced capital to cover expenses without a quick upside in profit may plunge a business owner deeper into higher cost debt.

Business loans are still available in nearly every community – particularly Small Business Administration (SBA) microloans and Community Advantage loans – but they require a little patience from the small business owner. The upside includes lower interest rates and more time to pay off the loan – usually 3 to 10 years. To see if you qualify for this low-cost capital, click on Prequalify Today or talk to an SBA loan expert.

Leave a Reply

Your email address will not be published. Required fields are marked *