The business world is always competitive, therefore, having a unique business idea is very crucial for the survival and success of a company. However, it is not the only requirement for achieving various business goals. It is equally important to have enough funds to make the business vision a reality. While aiming for the growth or expansion of your business, a business loan can prove to be very helpful. With a number of business loan lenders available in the market, how do you choose the best loan offer that can help in accelerating business growth?
Here is a detailed guide that can help you understand and shortlist the best business loan lenders. This way you can make an informed decision and make the most out of your business loan.
- Lender’s credibility
A lender’s credibility is one of the most crucial factors to look into while searching for the best business loan lender. At the time of shortlisting lenders, ensure that they have transparent loan terms, the presence of an official website, and also a valid physical address. In case you are making a business loan application for the very first time, make sure to research online and read through reviews to ensure the credibility and reputation of the lender.
Browsing through the lender’s website and looking at their social media presence can help in assuring the reliability and trust laid by satisfied customers. Try to look for any industry awards, ratings and recognitions for further assurance about credibility. To search for the best lender, you can reach out to business acquaintances who may have already borrowed from a business loan lender and had a good experience.
- Loan amount
Go for a business loan lender that offers a sufficient loan amount for funding your business expansion plans. Taking a business loan that is not sufficient to support your business plan may be of no use. Whether it is for purchasing inventory, upgrading equipment, expanding the workplace, hiring skilled employees, or any other plans, the lender should be capable of offering a suitable loan amount.
- Interest rates
Before making a business loan application, one of the important aspects to think about is the interest rate on a business loan. This is a determining factor that has an impact on your EMIs and overall loan cost. Qualifying for a low interest rate on a business loan can result in a lower cost of the loan.
While evaluating business loan interest rates, check the rates offered by lenders instead of the features highlighted on their website. The final interest rate offered by the lender depends on various factors such as loan amount, loan tenure, credit score, etc. To ensure that you get the best interest rates, you can compare your options before finalising one. Check your credit score and if it is below 725 you should try to improve it and enhance your chances of getting a business loan at lower interest rates.
- Repayment tenure
Select a business loan lender that offers flexible repayment terms. This will allow you to opt for a loan term with affordable EMIs. You can also make use of a business loan EMI calculator to estimate potential EMIs and adjust the loan term to make the monthly payments easier. The repayment tenure flexibility makes EMI payments manageable as per your monthly budget and repayment capacity.
- Application process
Pick a business loan lender that offers a streamlined loan application process. These days, many borrowers pick lenders that have online business loan applications set up. This is because it involves minimal paperwork and faster loan approval. There are also helpful tools such as EMI calculators and credit score checkers that ensure a clearer and faster process. Since the entire loan application process can be done online, it is far more simplified and you can get approved almost instantly.
- Collateral requirement
Looking for collateral-free business loans can help in taking away the burden of setting aside assets when they are needed for business usage. Since you can get unsecured business loans without offering any security or collateral, you can be free from any worries about giving away the business assets. Therefore, pick a lender who can offer a collateral-free loan.
- Customer service
One of the most important aspects to check while shortlisting a business loan lender is the quality of customer service offered. Since you will require their help during various stages of the loan term, ensure that they can be easily reached through multiple channels and at convenient times.
Since taking a business loan can often be a complicated process, you must pick a lender that has helpful and patient representatives.
With the help of the above-mentioned tips, you can shortlist a business loan lender that will provide the best services both in terms of the loan amount and loan servicing. This can help in ensuring a long-term sustainable relationship with the lender which can prove beneficial for the business in the long run.