The small business industry is brimming with excitement and creativity, but there are times when you need a quick cash injection to realize your business goals. Breaking into your chosen niche and making a success of your business can be really difficult. It’s unfortunately, one of those endeavours that is full to the brim with entrepreneurs. So, if you’re looking for a business loan to make your business stand out from the crowd, you may get what you’re looking for online. But, how do you narrow down the best loan?
If It Looks Too Good to Be True…
It definitely is! If someone came up to you and offered you a case full of cash and asked for little in return, of course you’d be tempted to take it. But, calmer heads would soon prevail and you’d be asking ‘what’s the catch?’ Many lenders will advertise loans at low APRs while they’re fully aware that most applicants won’t end up with a low APR. It’s best to choose a lender with transparent terms so you know exactly what you’re borrowing and returning from the get-go. If you do choose a company that advertises a low APR, make sure you find out your exact APR before accepting terms and conditions.
Read the Fine Print
The trouble with agreeing to anything over the internet is that it’s so easy to disregard the fine print and electronically sign your life away without a thought. When it comes to loans, you can’t afford to ignore the online paperwork. There are many lenders that will offer a low APR for the first year but increase the percentage after that period, leaving businesses struggling to pay the loan amount back. It’s so easy for businesses to be forced into bankruptcy because of poor financial decisions. Read every word before signing on the dotted line.
Know Your Fees
Unfortunately, the APR isn’t the only fee that usually comes with a business loan. There could be processing fees, administration fees, late payment fees, early repayment fees and more. Before deciding on which online loan to accept, it’s important for you to know what your lender is likely to charge you. Some businesses have even found that the amount of loan agreed upon is less when it arrives in the business bank account because fees have already been deducted. Click here for more info on typical business loan fees.
Get Everything in Order
You’re far more likely to get a better business loan if your business accounts are in order. Make your payments on time and address any bad credit. You should also have your business plan updated and be able to account for what the business loan will be spent on. Your lender will be able to work out what you can afford to repay, so it’s a good idea that you do the same. Realistically look at the money you have coming in and what you can afford to go out.
Online loans are often a better option to approaching your bank, but don’t let your excitement make you hasty.