How to Choose Lender ? Watch Out for These Costly Traps.

Small Business LendingSmall-business owners seeking financing have hundreds of options thanks to a proliferation of lending firms and programs offering fast and easy solutions. But the reality is only a few of these choices will be the right fit for your nascent business. Although the lure of quick cash regardless of personal credit can be
tempting, be wary of common traps when considering a lender for company:

1. Know when business credit services are necessary– and when they absolutely are not. While business credit can be important as your businesses matures, it doesn’t make a difference for a startup applying for a loan. Startups are not expected expected to have a strong business credit file, so any firm extolling the necessity of business credit services to apply for a loan may actually be doing you a disservice.

Instead, concentrate on the strength of your personal credit, as lenders will focus on this more because you will ultimately be responsible for paying back the loan.

2 Know the Price you pay for speed and convenience. Some short-term lenders and cash advance companies offer so-called “fast” loans with quick application processes and a lax review of personal credit. This speed and convenience comes at a cost, however. Entrepreneurs should be careful when considering a cash advance, especially if rates and pay off timeframes are extremely harsh. Some firms offer annualized percentage rates as high as 200 percent with amortizations as slow as three to four months- terms like these can be nail in the coffin before a business is even birthed.

Protect your business by reading all terms carefully and make sure you have a clear plan to pay back the loan before signing on the dotted line for a cash advance.

3. Don’t outsource, know your own business plan. Be wary of any company insisting that you need a business plan financial forecast in order to sell you an expensive business plan package, Additionally, If you’re paying someone else to do this work for you, then your business may have bigger problems. Having a direct hand in developing the business plan and financial projections ensures that you as the business owner know the ins and outs of the company and have defined goals for growth.

Have a good understanding of what makes your business tick in the present, and where it is realistically headed in the future to protect it from other unnecessary expenditures that you may encounter throughout the startup journey.

XML Sitemap

Dividend tax only on dividend income above Rs 10 lakh
Snapdeal’s Kunal Bahl describes what it takes to get into the haloed club
Time to Surf the ECB’s Market Wave
How to get loan you against PPF – A discussion
Axis Bank limits support for snapdeal’s seller financing programme.
Mukesh Ambani led Reliance Jio accuses Bharti Airtel, Vodafone, Idea of preventing launch
Mahindra looks north after UK electric car launch
Amazon, Flipkart may soon have to stop cash-back offers
No Preview
Snapchat raised $1.8B in a Series F round; leaked deck reveals revenues
How to Find an Angel Investor
Companies boost green bond offerings on government’s clean-energy push
Alibaba, Ant Financial inject fresh cash into India’s Paytm
BRICS Bank to fund inclusive needs of emerging nations: PM Narendra Modi
How to make money in Real Estate
How to become a Best Real Estate Agent
What Kind Education Do You Need To Become A Billionaire?
Microsoft will stop updating anything older than Internet Explorer 11. But millions are still using the old browsers.
How to get loan you against PPF – A discussion
Google’s Nexus Lineup Offers Better Security Among Android Phones: Cambridge Report
Reliance Jio spending Rs. 1lakh crore on 4G rollout