Getting approved for a small business loan can help your business grow and move to the next level. While small business loans can seem somewhat straightforward, there are some caveats that are important to know and understand so that you won’t make a huge mistake that can set your business back and cause your growth to falter. In this blog, we’ll discuss some crucial do’s and don’ts of applying for and receiving a business loan so that you feel the remorse of an uninformed mistake. If you’re searching for a trusted and reputable equipment financing, SBA loans, or other lending programs for a small business, contact Northpoint Commercial Credit today. With over 10 years of experience and dedication to the success of small businesses, we’re here to help you choose the right financing option for your business so that you’ll continuously see growth and change. Contact our team today for an evaluation and business financing program for your small business!
Do's and Don'ts of Acquiring a Small Business Loan: Part One
Do Make Sure You Choose Correct Timing
Applying too early or too late for a business loan can affect your business adversely. Choosing to not apply due to fear, thinking you won’t receive the loan, or other issues can cause serious drawbacks to the growth of your business. Don’t hesitate if an excellent deal comes your way or if you suddenly get approved. If you need a business loan and you’re as sure of the timing as any, take the plunge.
Do Borrow the Correct Amount
This is what gets small businesses just getting off of the ground in trouble. If you don’t apply for a large enough loan, you’ll find your business running out of money quickly and you’ll be faced to either slow down growth or apply for another loan. On the other end of the spectrum, you can apply for too much and be faced with paying too much interest on an amount that you don’t really need. In this case, too much money can actually be a bad thing. Work with the lending officer to determine the correct and optimal loan amount that is right for your current small business size.
Don’t Assume Anything, Especially if This is Your First Loan
Assumptions will never get you anywhere, and they can have serious repercussions for small business owners. Ask to see every form and proposal, and spend time going over them carefully and multiple times. Show them to a trusted business advisor who has apply for many loans before, and make sure to agree on the terms, interest, and repayment schedule with the bank or lending organization and get it in writing. If you feel like you need to negotiate terms, don’t back down from your needs or stipulations until you feel satisfied by the terms.
Do Your Research
If you’re considering a small business loan, make sure to evaluate several different firms or banks before settling. You may think that you’ve gotten the perfect interest rate or loan amount, but it always helps to check out other firms to ensure that what you’re getting is the right loan amount and interest rate for you. This can even be a great way to negotiate terms so that you can get an even better rate or higher amount than previously proposed. You can also make sure that you choose a reputable company with plenty of experience and success in loaning to small businesses.
Don’t Forget Your Partner
If you have a business partner, make sure to decide on the lending service, loan amount, and interest rate together. Ignoring your partner’s opinion or worries can create a rift between both of you, and it’s vital to your success to settle on the final decision together. You can work out these issues with your loan officer or banker so that you can find the perfect compromise for your small business loan.
Choosing a small business loan can be overwhelming, but it can be a huge step towards growing your business. If you’re searching for a trusted professional team that has years of experience in assisting small businesses in acquiring SBA, equipment loans and small business financing, contact Northpoint Commercial Credit now. We’re dedicated to helping small businesses succeed and grow. Fill out our online form today and a passionate and professional team member will help you choose the right loan for you. Call or click now!