5 Tips to Find the Right Lender
The nature of business loans is that you don’t need them until you do – and when you do, you need them RIGHT NOW. Because of that, it puts tremendous pressure on a business owner to identify and select a loan source quickly – and often without the expertise to determine the best fit. Instead, entrepreneurs and owners will choose based on other less critical factors, sometimes overlooking the most important aspects of a lender.
Sadly, there are many less-than-reputable lenders out there. But more importantly, some lenders are just not a good fit for your business financing needs, and some businesses learn too late that they’re working with the wrong lender. Here are five pieces of advice you can use to find the right lending resource the first time.
#1 Research Your Lender Plenty of shady lending options haunt the lending market, and a little research can help root out the good from the bad. Do some searching to see if the owner of the company is listed on the business’s website. If the owner does not stand behind his or her business, it’s a surefire sign that a business may not be engaging in standard practices.
#2 Read Business Testimonials While you may not have direct experience dealing with a particular lending option, it’s most likely that someone else has. Do a little digging and find past clients. A simple Google search for lending reviews can usually lead you in the right direction, and don’t hesitate to follow up and talk directly with previous clients.
#3 Search for Small- and Medium-Sized Business Specialists SMBs have unique needs that lenders must understand. Ask yourself – “Does this lender understand what Main Street business owners are going through and what steps a small business owner needs to go through to be successful?”
#4 Look for Lending That Won’t Tie up Collateral As an SMB, you want to maximize your assets at all times. Liens on your property limit what you may able to do in the future, which can curb your overall profit potential. Try to find lending options that don’t tie up collateral so you can utilize that collateral to grow your business in the future.
#5 Protect Your Personal Credit Rating Lending options that blur the line between personal credit and business credit will cause problems for you when you do decide to pursue personal lending options. A properly-structured lending option will effectively separate your personal credit profile from your business credit profile so the business debt won’t have an effect on any personal transactions.
When you’re considering lending options, being extra careful with whom you do business can make the difference between a business’s success and failure. Keeping these helpful tips in mind will hopefully curb any potential pitfalls and push your business forward toward future prosperity.