When it comes to searching for the ideal lender for your business loan, there are many considerations that you need to take into account. The importance of the decision is amplified further by the fact that you can stand to save thousands of pounds if you do take the time to research all the options available to your business.
Whilst of course the rates are important, they aren’t the ‘be all’ and ‘end all’ when it comes to sourcing the right finance for your circumstances. You must also choose a lender who takes the time to ensure they tailor their offering to your business’s specific requirements.
Let’s take a closer look at some of the factors you’ll want to consider when finding your perfect lender, starting with the costs involved.
No matter what type of business loan you decide to opt for, the amount that your business will have to repay will largely depend on the attached interest rates. These will determine how much extra you’ll need to repay on top of the amount borrowed, so the lower the interest rates, the lower the repayments.
When selecting business finance, it’s important to remember that the final interest rate you receive may be different from the one originally advertised. Each would be borrower will always bring a different set of circumstances to the table and so lenders can only offer an indicative rate up front before making a full and accurate assessment of your business. In the case of business loans, it definitely pays to carefully study the different rates during your decision process when selecting the perfect lender.
Whilst everyone will want to repay as little as possible when it comes to a loan, it’s worth remembering that in some cases the loan with the lowest overall cost may not be ideal for your business’ needs. You may want to have a loan taken over a shorter or longer term, or may want more flexibility when it comes to making payments, so be sure to take everything into consideration before making a final decision.
Ease of Application
There’s nothing worse than spending hours trying to complete an application form, either in paper form or online, only to then have to wait days or even weeks for a decision. As a business owner, you simply don’t have the time to spare when it comes to filling in large application forms or waiting around for a lender to get back to you with their decision.
It goes without saying that lenders need a wealth of information about your business when assessing each application. They’ll need to know the purpose of the loan, details about your business finances and what collateral, if any, you’re able to provide. They may also need added information about you and your fellow directors, particularly if a guarantee is needed to secure the funds at a competitive rate. Gathering all of this information ahead of applying can be a difficult and time consuming process, especially when you have a business to run.
Most of the loans available through Ping Finance can be applied for in minutes with some lenders able to offer an instant online decision in principle. Others may need additional paperwork to verify the financial information you provide, so if you do need funds quickly then it’s well worth checking out the speed of the underwriting process before you apply.
Speed of Payment
Whilst the speed of the application process is of course important, the time it takes for funds to be transferred can be of equal priority to business owners. Whether you need a bridging loan to complete a property purchase at auction, or simply need additional working capital for payroll from a short term business loan, there are plenty of reasons why you might need capital quickly.
Business finance tends to be more complex so it should come as no surprise that they can take longer to underwrite. However, each provider will be able to give you a clear idea of how long it usually takes funds to reach you once your application has been accepted. Use this information to make sure that they can deliver what you need when you need prior to accepting. If you do require funds in a hurry, be sure to factor this into your decision making process.
Business finance can be intricate at the best of times and historically one of the biggest concerns for borrowers has been understanding the ins and outs of each product.
In recent years this has become more and more of a priority for lenders with credit agreements now clearly stating exactly how much will be repaid, when the repayments will be made, how the loan agreement is structured and information on any fees and charges that may be applicable.
Understanding your loan is essential when it comes to successfully managing your repayments, so take a thorough look at the credit agreements and loan information when finding your perfect lender. If you do require any further information about the any part of a loan you are taking out, be sure to ask for it, you want to ensure you are working with a lender who is completely transparent and available to help at any time.