Are you planning on starting your business? Is your business facing a shortage of working capital? Or do you want to expand your operations and introduce a new line of products? Today, business owners might look for a loan due to a variety of reasons.
You want a lender that offers affordable business loan interest rates and flexible loan terms while meeting your unique financial needs. However, with several lending options available in the market, choosing the right lender can be challenging. Wondering how to select the right lender?
Here are 5 things to consider.
1. Credibility of the lender
When you start looking for finance options, make sure to shop around and contact credible lenders. Thorough research can save you from any future inconvenience. When you contact a lender, ensure they’re upfront about their loan terms and have a proper physical address and an official website.
Do an online search about the lender and read customer reviews for an informed decision.
2. Flexible offerings
Look for a lender that offers a hassle-free loan application process. While you still need to carry out the standard procedure and submit the relevant documentation, it’s best to apply with a lender that provides faster, online loan processing.
Furthermore, determine whether they offer flexible repayment options. Do they have weekly or monthly repayments? Will they accept part prepayment of the loan? Make time to understand your EMI structure and payment schedule. Use an online business loan EMI calculator and get an idea of your EMIs based on the terms offered to you.
3. Available interest rate
Compare lenders to get the best interest rate available, as it ultimately decides how much you will pay for the loan. Get in touch with the lender to determine your business loan eligibility comprising factors such as credit history, the amount of loan, repayment tenure, etc. This is because your actual interest rate depends on these factors.
However, remember that a competitive rate should not be the only driving force in your decision, and you should also consider other loan aspects.
4. Charges and penalties
Getting favourable business loan interest rates and the repayment tenure is not the end of it. You must also ask your lender if they charge any processing fee, verification charges, etc. Most lenders also charge you a late payment fee or penalties on prepayment of the loan. So make sure to enquire about the related rules and regulations.
While most of these costs are mandatory and unavoidable, ensure that your lender is upfront about these.
5. Customer service
The right lender will not only offer you the best business loan terms but also provide excellent customer service. It is ideal to opt for a lender that is readily available to handle your loan-related queries and give you hands-on professional assistance.
The bottom line
Obtaining finance for your business can be an overwhelming process, but the right lender can ease your worries and make your borrowing journey smooth. Make sure to estimate your business needs and various offerings available before making any decision.