If you’re looking for a business loan, you’re probably finding the process confusing. Which lender should you choose? Which loan is best for your business?
The easiest option is to use the free services of a business loan marketplace, which will filter loan offers based on your profile and needs, and match you with the best lender and loan for your business. Whether you decide to take this simple route, or else shop around yourself, you should start off prepared. To help you find the best loan offer, you should know the answers to these few questions:
1. How much money do you need?
You can’t apply for a loan unless you know how much money your business needs to achieve its goals. Take a look at your business strategy, decide what immediate actions you’ll be taking and how much money you’ll need to fund such activity.
2. What do you need the money for?
Most alternative lenders are happy to approve loans for any business purpose, but it’s important to have a plan and know upfront what you’ll be doing with the money, as there are specific loan products for specific purposes. For example, you can apply for Vehicle Finance to fund the purchase of new business vehicles and Invoice Factoring to close the customer payment gaps.
3. How quickly do you need the money?
Alternative lenders generally have quick turnaround times, some providing funds in as little as 24 hours. In contrast, banks typically take weeks to approve a small business loan. Most small-to-medium businesses simply cannot wait that long for the cash, which is why alternative lenders are generally ideal for SMEs.
4. How much flexibility do you need from your loan?
If you choose an online lender, they generally have very flexible loan terms, although different products have different levels of flexibility. One of the most flexible options is the Business Line of Credit, which will grant you approval on a fixed loan amount, but you can draw on this amount as and when you need it. The benefit? You only need to pay interest on the amount you actually use. Another very flexible loan product is the Merchant Cash Advance, which allows you to pay back as you trade. When business is slow, you get to pay back less.
With so many online lenders flooding the market, you can literally spend hours researching all the different options. Make it easy for yourself, save time and money, and take advantage of the free services of a business lending marketplace.