Taking out a business loan can be a stressful challenge. To take the stress out of negotiating a fair business loan out of your life, continue reading to discover a few invaluable business lending tips.
Speak with multiple bank managers from different banks:
If you’re looking to take out a business loan, it may be tempting to take out a loan with the first bank which offers to approve a loan for your business. However, in order to obtain the lowest interest rate possible on your loan and your desired loan term, it’s a smart idea to speak with multiple bank managers, from a wide variety of different banks.
As you may be given several different offers which will offer varying interest rates and loan terms. As while a few percent, when it comes to an interest rate doesn’t seem like much, in the long term negotiating a slightly lower interest rate could save your business tens of thousands of dollars. Or more, depending on the size of your loan.
Choose a business manager who is easy to contact:
These-days some business managers are available by live chat and email as well as in person. So it’s a wise idea to choose a business manager who is available in person and can also be contacted via live chat or email. As there may be instances where you want to ask your business manager a few quick questions via your smartphone, during a busy work day, in which you have no available time to attend an in person meeting at your local bank,
Try to pay off as much of your business loan as possible:
While it can be tempting to pay off your business loan over a long time period, the earlier that you pay off the entire sum of your business loan, the better. As you’ll pay less interest on your business loan. So if your business enjoys a particularly successful quarter, you may want to sink some of your profits into paying off a large chunk off your business loan. After all, the sooner you pay off your entire business loan, the sooner you won’t have to factor loan repayments into your business’ current liabilities.
Make sure to talk to a lawyer:
In order to avoid a lawsuit, it’s also worth talking to a lawyer, to ensure that you meet all of your legal obligations when it comes to taking out a business loan.
Think about the alternatives of taking out a business loan:
Before you sign the dotted line on a business loan contract, you may want to consider what your business’ alternative options are. For example, you may be able to sell privately listed shares in your business, in order to accumulate the capital which you need, to advance your growing business. Or you may want to ask family and friends to loan you the capital which you require at a lower interest than the bank. You may even want to take on 1-2 stakeholders, who may be willing to give your business a sizable capital boost.
As there are distinct disadvantages of every option, make sure to select the option which best suits your individual business as well as your unique business goals.
Hopefully, you’re now ready to either start hunting for a competitive business loan or to find alternative ways to inject extra capital into your growing business.