Chances are, you are going to need some funding to get your small business off the ground. While there are plenty of options available today to those who want to start their own business with next to nothing, at some point, every company is going to need some money in order to grow. You could go to the bank and apply for a business loan, but the chances of rejection are quite high, with bank loan acceptance rates plummeting, particularly for new businesses with little to show in the way of financial records. So, what can you do? A small business lender might be a particularly good idea. Here are some factors to consider before choosing the right one for you.
Type of Lender:
There are several different non-bank lenders available for businesses. Do some research and find out everything you need to know about non-bank lenders so that you can make the right decision based on what’s right for your business. For example, you might need a small business lender that specialises in brand-new businesses, or perhaps your poor personal credit score is holding you back, so you will need a lender who will not take this into account as much as some others.
Amount of Funding:
Consider the amount of funding that you are going to need. Small business lenders will lend various amounts of money depending on a number of factors, but if you need a large amount of funding, consider other charges, such as interest rates, and think about whether or not another option such as an angel investor might be more ideal. On the other hand, if you only require a small amount of credit to use as a safety net, a business credit card might be a more fitting option for you.
Repayment:
Consider the repayment terms for the particular lender and make sure that you will be able to keep to them. Devise a plan for how you are going to make repayments and consider the current incomings and outgoings of your business in order to ensure that you opt for both a loan and a lender that your company can easily afford. Never apply for a larger loan in the hope that your business will make enough money to repay it in the future. If your business becomes more successful and brings in more profit, you can always apply for top-up funding if you need it.
Alternatives:
Finally, it’s worth exploring all of your options and determining whether or not there are any alternatives that might be cheaper for you in the long-run. For example, you might want to consider asking family and friends to invest in your business or making use of a crowdfunding website designed to get new businesses started. Small business loans are certainly a convenient option for most, but they are not the only option out there – so make sure to do your research, weigh up what’s available and go with the best option for your business.
If you want to get funding with a small business loan, keep these tips in mind to ensure that you find the best loan and lender for your business.
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