Choosing a Lender? Watch Out for Costly Traps.
Small-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 business. Although the lure of quick cash regardless of personal credit can be tempting, be wary of common traps when considering a lender for your 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.
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 Some lenders will offer you a low rate and tack on multiple points in fees and commissions. Make sure to read all of the terms of your contract so that you can compare apples to apples. What you save in fees may be more than a point or two in interest.
3. Be wary of any company insisting that you need a business plan and 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.
4. Always use a TRUST WORTHY source. Many companies will promise you to be confident. But they will shop your file out to numerous sources, damaging your credit and exposing your private information. At Accelerated, we know every file, and will NOT shop you around like others.
If you need additional information on products or services, please contact us so we can further assist you.