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4 Things to Look Out for When Getting a Small Business Loan
Four Things to Look Out for When Getting a Small Business Loan
You own a small business and you need extra financing — it’s a tale as old as time. You want to secure a business loan fast, easily, and with no personal guarantees involved.
You don’t have a great credit score and you don’t want to go through the trouble of justifying your expenses with an elaborate business plan. Basically, you would like to benefit from a type of flexibility that one-size-fits-all types of loans cannot provide.
What You Need to Do to Get a Good Business Loan
Whenever you need capital — to expand, to keep operating, or to weather a storm — small business loans have the benefit of speed, transparency, and simplicity that more traditional financing options just cannot provide.
In many cases, all you have to do is fill in a short online form and a financial specialist will get back to you within 24 hours. A brief conversation is all it takes for them to assess your business needs and your general financial situation.
After that, you will generally receive a personalized offer and the possibility to sign everything online or at a nearby branch. Within a few days the much-needed funds will land in your business account and you’ll be all set.
What to Avoid When Searching for a Small Business Loan
To make sure you navigate safely through the abundance of financial information out there and make an informed choice, you must first be aware of the potential traps of small business financing.
1. Avoid middlemen and third party involvement
With nobody earning a commission on your financing deal, you can pay significantly less and, by not involving third parties in the lending decision, the entire process can happen much more quickly.
You should also make sure your information is not shared with anyone else, as security should always be a priority for you, both as an individual and as a business owner.
2. Avoid excessive automation
Technology helps speed up things and cut down costs, but it can also become a burden for customers who need human interaction. As a small business owner looking for a cash advance or an online loan, being able to get in touch with an actual specialist is important, instead of just ticking boxes in a rigid form.
Unfortunately, many online lenders tend to overly automate their flows, not taking into account that small businesses have different needs and they are all unique.
3. Avoid lengthy processes and predefined offers
Getting a loan from a bank is likely to give any small business owner a headache. Not only does it take months to get through the entire approval process, but a lot of paperwork is involved as well. In the end, you are the one who has to fit their requirements, instead of the other way around.
What you should do is opt for tailored solutions from reputable direct lenders and enjoy that extra flexibility and speed of loans for businesses with no credit.
4. Avoid predatory techniques
Stay clear of confessions of judgment and other similar tactics that prey on small business owners. Also, make sure that you can pay your balance early without penalties — there are companies that unfortunately incur them.
In fact, it’s even better if you can get early payment discounts mentioned in your contract.
Final Small Business Loan Insights
In order to access a fast and convenient financing solution, you generally need to have been in business for at least 6 months and prove monthly sales of $10,000 or more.