Looking For A Business Loan

By: Jeff Dickey0 comments

Small businesses have more financing options today than ever before, yet navigating the maze of loan types and lenders can make it challenging to choose the right loan and the right lender for your business.

When it comes to looking for the best loans for your business, you will see that banks have been given a run for their money because of other lenders that have come into play. Ever since the 2008 subprime mortgage crisis, a recent survey has established that this is the right time to get a business loan, mainly because economic conditions have improved. In addition to that, the rise in competition has enabled lenders to slash their rates for the purposes of getting good prospects.

Having said that, most business owners are finding it hard to obtain business loans from traditional banks according to the survey. It is however, great when you qualify to get a loan from a bank, mainly because of the low interest rates. Online lenders are, however, taking over and this is because they work directly with small business owners, while also making the lending process more convenient and not at all difficult. The fact that they have more transparent terms, quicker turnaround and flexible lending criteria makes them popular for small businesses.

The best peer to peer small business loans include;

  • Funding Circle
  • Prosper
  • Lending Club

The best direct lenders for small business loans include;

  • OnDeck
  • Kabbage
  • Foundation

Choosing the right loan for your business

Needing money fast for your business may incline you to accept the very first loan offer that comes your way. This might not be the right move because not every business loan is good for you. Some of the guidelines to consider include;

The amount you need

Knowing how much you need is important and also ensure that you are realistic and flexible with the range you are asking for. A loan offer that is too small is actually not worth taking since it will not fully accomplish the purpose it is intended for while one that is too big will mean bigger payments at the end of the day.

How much the loan costs?

While interest rates may determine which particular loan costs more, it’s also important to ask the lender for the loan’s Annual Percentage Rate (APR) as well. This takes into account loan processing charges and origination together with additional fees thus giving you a more accurate estimate where a loan’s total cost is concerned.

Consider the above mentioned and you will be glad that you did!

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