5 crucial factors regarding business loans

These are 5 factors you want to consider when evaluating a business loan offer.

This is important because there are a lot of different types of funding available to business owners, and not all of them are ideal for your specific business.

In fact, sometimes you could qualify for a loan with much better terms and conditions, and not even know.

So let’s go through 5 of the top factors you want to consider when evaluating a business loan offer.

#1: The Loan Type

Depending on the industry you’re in, some types of loans are more suitable.

For example, many business owners in the Construction and Trucking industries are ideal candidates for loans like Equipment Financing.

Some industries like Restaurants need access to faster capital like Merchant Cash Advances and Business Lines of Credit.

It all depends on your industry.

#2: The Interest Rate

The interest rate on your loan is important because it will ultimately determine how much you will pay to get loan (not including other fees).

The thing to remember regarding your interest rate is the return on investment you’re going to get.

If you take the funding you get and grow your business by 30-50%, then even if your interest rate is high, it was worth it.

So always keep in mind what you are going to use the funding for and make sure it will give a good ROI when compared to the interest rate.

#3: Loan Repayment Terms

It’s important to make sure you can afford the payments required for the loan.

Remember, there are lots of different types of funding.

Some require daily or weekly repayments.

Some require the traditional monthly payment.

Regardless, just make sure the numbers make sense and you can comfortable make your required payment.

#4: Loan Fees

There will always be fees involved with your loan.

This is how banks, lenders, and brokers make their money often times.

It’s not a bad thing. Everyone needs to make money.

However, some lenders have much higher fees than others.

If that’s the case, make sure you’re aware of it and also what you are getting in return.

#5: Customer Service

Believe it or not, this is one of the most important factors to consider.

Having a good loan broker or direct lender that understands your business, answers your calls, provides answers to your questions, and genuinely has your best interests at heart is invaluable.

When you find that company, stick with them because they can be hard to find.

Conclusion

So those are some of the main things you want to consider when evaluating a business loan offer.

Don’t be afraid to shop around.

At the end of the day, it’s your business and you need to make sure you’re getting the best deal just like anything else.

Get qualified for business funding today by visiting our funding platform ROK Financial here.