Nowadays businesses have more financing options than ever before, yet navigating the market for loan types, lenders and offers makes sense. Doing this not only helps you to choose the right loan product but also the right lender for your business loan.
Gone are those days when people had to visit banks while seeking a business loan. The online lending options have changed everything, as the use of technology has fastened up the entire process. As a result, comparing among the lenders and processes to provide business funding has become much faster. But in spite of all these things business owners need to evaluate their loan options and look for certain things to choose a potential lender for their business.
Things to look for when comparing business lenders.
A simple Application Process.
Online moneylenders normally have a streamlined loan application process. Generally, an online money lender will require fewer reports than customary bank loans. However, in the case of a bigger business loan amount, more documentation work might be required.
The process starts with filling the online business loan application form. Moving ahead the next step is submitting the required documents which include your 6 months bank’s statement, business sales history and your last year ITR papers. So, to make it convenient for you, it’s important to choose a lender who has a simplified loan application and approval process.
Pricing for business loans is the total cost at which the loan is available to the borrower. This includes the interest rate, processing fee, and applicable taxes. All the charges included should be clear, and easy to understand.
A good lender is the one who lends you at a fair price and includes all the fine lines in the loan agreement clearly. By streamlining the application procedure, these business moneylenders can find you a solution quicker while frequently decreasing the number of loops your business is required to hop through.
Lender’s Reputation & Client Reviews
Consumer loyalty is a useful method to assess a potential business loan provider. Search for steady, positive client reviews, good ratings on Google & Facebook and on websites such as Glassdoor, Mouthshut, etc.
It’s a smart thought to search out a lender that has a simple to-discover telephone number and contact data. It ought to likewise have an ‘About Us’ segment on its portal along with the helpline or customer support number and chat option.
Penalty and Foreclosure Charges
Lenders charge penalty and late fine when you delay the payments. So, while choosing a lender for your business loan you have to be clear about these charges. Ask the lender if you have any doubts and do read the fine prints in detail to avoid any confusion and hidden charges.
The same is true with the foreclosure, some lenders charge for foreclosing the loan, while some have a lock-in period for it. Generally, the lock-in period for a business loan varies from one to two years.
Mode of Payment
There still exists some lenders who accept a paper cheque for the payments. However, most of the online lenders have turned to automatic debits via a NACH withdrawal from a business’ bank account on the fixed date which is mentioned in your loan agreement. This makes the entire process convenient for the borrower and a track record is also maintained at the same time.
With all the business financing options available, comparing business loan lenders proof to be very helpful. You can borrow from banks or online moneylenders to get lower rates and maximum benefits.
You can choose from conventional business loans, business lines of credit, invoice financing, microloans, and so on.
Well, for worry-free borrowing, you have to invest your time before you lender, research well on the product and lenders in the market. Go with the one whose rates, charges and policies suit you and your requirement the most.