Any business needs a continuous cash flow to survive and in situations where the market is slow or sales are down due to some other reason, the business must have financing to keep itself afloat. Business loans help the business survive in such situations.
In short, every business needs financing at some point or other to either sustain itself or to grow. But this financing can become a self destruct tool if you are paying an exorbitant business loan interest rate. As a business owner you must be very careful about the cost of such funds.
At the same time, you cannot avoid financing entirely and forgo the chance to expand your footprint in the marketplace, take advantage of a market change, invest in new assets or increase your production capacity.
In short, keeping the interest rate low is very critical when you choose to take a loan for your company. Here are two things to keep in mind that will help.
Present yourself as a good risk with a great credit score
Yes, the first thing that any lender looks at when you want a business loan apply online or directly, is your credit score. Wait a minute, this is not a personal loan, then why is your personal credit rating important? When your company is new, that is, less than 3 years old, your personal credit also assumes great significance to lenders. After all, your business has not been in this space long enough for them to get an idea of its credit worthiness and ability to weather financial storms.
This is why when the business’s credit history is assessed, the business owner’s is checked alongside. If you have a great credit score and a solid credit history showing that you are 100% reliable with repayments, this reassures lenders about giving you a business loan. Apply online and you will be asked to upload your credit score along with other application documents.
To address this, download your free credit report and check it thoroughly. It is not unheard of to find errors in it. For example, some payment that you have made may be showing up as unpaid. Correct these errors and improve your score before you proceed to the next step to show the lender that you are a good risk and worthy of a low business loan interest rate.
Don’t settle for the first lender you see
It can be a time consuming, mentally exhausting task to find a lender, apply for a loan, complete verification, wait for sanction and then finally get the cash in your account. To simplify this complex process of getting a business loan, apply online and reduce some of the physical strain but you cannot afford to compromise on comparison shopping lenders. Make full use of the internet to compare lenders in terms of their:
- Rate of interest offered
- Terms and conditions
- Transparency of processes
- Customer reviews
- Reputation in market
- Customer service
- Ease of application
- Duration to sanction
Placing lenders side by side and comparing them on all these aspects helps you find the one of good repute with the best terms overall. You will be surprised at how easily this comparison helps you identify a loan with an attractive interest rate.
This can be a time- consuming affair but the money you save in terms of interest paid over the life of the loan can be invested in your business- this is a powerful incentive for you to get to work.
Last Words!
Once you have found your lender with an affordable business loan interest rate, it is time to carefully go through the application process first. Gather all the data you need so that when you make your application, you give in all the details asked for.
This speeds up the processing and takes your loan application to the next step in the shortest possible time. Keep in mind that time is money for your business. The sooner you can get the loan funds in your account, the sooner you can invest it in your business and power it up.
