Many businesses are unable to acquire loans because they don’t know which kind of loan to apply for, or which institution to approach for a loan.
More than the value of the loan itself, it’s important to consider the nature of the loan and what it entails for you as a business. You want to make sure that the loan is a good fit for you in terms of payback period, annual percentage rates, and that it is applicable for the purpose you need it for. Not all lending partners are the same and these are some of the most important things you need to keep an eye out for when choosing a firm to provide you with financial assistance.
Triple B Rating
The Better Business Bureau provides ratings for businesses of all kinds based on a scale from A+ to the lowest grade of F. BBB rates all kinds of businesses and this includes financial firms that are eligible to lend other businesses capital assets. If you are considering a company to work with for a loan, make sure you look at any accreditations or awards that they have. If they have been rated by BBB, the grade that they have scored will give you an idea of the quality of services that they provide.
Whichever rating system you use as a metric, be sure to look into the specifics of that rating and how that score was awarded to the business.
Lender Matching Services
Small to medium scale businesses can use the wide range of available lender-matching services to connect with a good financial institution rather than having to shortlist one on their own. Moreover, if you get matched through Nav, you can quickly get a list of several companies that will provide you with financial assistance. Whether you are looking for a short-term loan, a business term loan, or a loan for equipment financing, you can give your specific requirements to the lender matching service and they will find a suitable lender for you.
With a list of companies through this matching service combined with companies that you will have researched on your own, you will have a good pool of candidates to choose from. This will be a well-filtered group that will meet all the requirements that you have set.
Filter Through Loan Type
If sorting through thousands of lending companies seems like too much work, a quicker option is to look for companies offering the specific loan you are looking for. In order to understand your loan requirements, you could hire the services of a business consultant to learn about the different loan options that you have and see which one will work best for you. Many financial assistance schemes offer the same functionality but different lenders have different names for them. This can be confusing especially when you are trying to compare loans between lenders, so professional help is really useful for this.
Filter Through Industry Type
A number of lending companies specialize in providing financial assistance to firms from a particular industry. It can be much easier to look for companies that work with businesses within your niche. Generally, lenders who work with particular industries such as agriculture, manufacturing, or trading will have a bigger variety of financial solutions which are specially made for businesses in a particular field of work.
This is a great option if you are looking for something very specific and can be much more beneficial than getting a generic loan. It will require some research as there are many kinds of loans that you will not have heard of in the mainstream financial lending market. Loans both small and large are available through these sources so invest some time here and it will certainly be worth your while.
As a small business or a new business especially, you will not have a lot of history to present to your financer. Banks and larger institutions require a lot of documentation and also have requirements for collaterals. Rather than getting caught up with all these technicalities and aiming to work with institutions that will be reluctant to work with you, it's better to explore the market for other options.
Lending service is a great way to connect with lenders who you would otherwise not even come across. The best solution is to use a blend of the approaches mentioned above to gather as many useful resources as possible, then you can sift through and pick the one that suits your needs the most.
