Choosing a Lender
Before going out and securing a loan, you should first decide on how much money you will need. Projecting the right amount of money to borrow will help determine what type of loan you need, and what you need to get prepared to apply for the loan.
Once you know how much you will need to borrow, you will need to decide on what type of loan will be best for your company. SBA loans are a great choice for some businesses, while others may see a short-term loan as a viable option. Weigh each option carefully, and realize a non-conventional loan may or may not be a better way to go.
Especially in this time and age, check out the reputation of each lender. If the terms and conditions seem too good to be true, be careful. There are more and more companies popping up that are trying to scam business owners into getting loans with them. Ask for references if need be, and do your own research on the company and/or person who is going to be giving you the loan.
Make sure that your potential lender understands the wants and needs of your industry. If they understand how your business is going to work, they will be able to know ahead of the game how easy (or hard) it is going to be to repay the loan.
Once you have found the right lender for your needs, you should read over the contract very carefully with your lawyer. You need to be aware of all terms and conditions. If there are any fees associated with the loan, such as repayment penalties. You don’t want to pay off your loan faster than anticipated if you are going to be penalized for it. Avoiding these types of penalties will be your best bet.