If you are planning to expand your business and you don’t have enough cash to do that, the best option would be to take a loan. There are many lenders that offer financing to small businesses, and some are online based. Finding the right financial lender for your business is not an easy task, especially with the many options to choose from in the market. So, what should you look out for when choosing a financial lender? If you are having a challenge choosing a lender for your small business, the points below can make it much easier.
If you have friends or family members that have taken a loan for their small business, ask them for referrals. Don’t forget to ask them what kind of experience they had with the lender.
It is important you choose a financial lender that has been registered and licensed by the state. If for one reason or another the lender is not licensed, its best you avoid dealing with them. Does the lender have membership to reputable professional associations in this industry? Has the lender received any recognition awards over the years?
Before you get the loan from the lender, it is important you do your homework and research more on the lender. Check what other people are saying about the lender on different platforms online. Read the customer testimonies on the lender’s website and social media platforms. If there are several unresolved complains against the lender, that is a red flag and its best you avoid dealing with the lender.
Does the lender have any experience? It is advisable you choose a lender that has more than 5 years of experience. The lender has a diverse knowledge in this field that they have gained over the years. If the lender was not offering good services to small businesses, it would have closed a long-time ago. You can call the lender and ask them how long they have been operating.
In addition, check the industries that the lender offers loans to. Go for a lender that deals with businesses that are in the same niche as yours.
What are the terms of the lender? It is important to check the interest rate that the lender will charge you. Choose the lender with the lowest interest rate. What duration of time will the lender give you to repay the loan?
It is important you ask the lender to give you their customer references. You can draft down some questions that you will ask the lenders past clients once you call them. The feedback you will get will help you in knowing what to expect, if you take a loan for your small business from the lender.