Whether you're looking to launch a small business or have recently done so, there's a good chance that you'll need assistance with financing at some point during your time as a business owner. The good news is that there are lots of lenders out there that provide business loans to people just like you. Before you sign the paperwork for just any small-business loan, however, there are some important mistakes you'll want to be careful to avoid.
Failing To Explore Specialized Loan Options
There are all kinds of specialized loan options out there that can provide you with lower rates or other favorable loan terms if you qualify. Many specialized loans are offered to women and minority business owners, for example. Take the time to research options that may be available to you and take advantage of any of those for which you qualify.
Hesitating To Negotiate On Your Loan
Taking out a business loan isn't exactly the same as taking out a home loan or car loan; you can actually negotiate with your lender to possibly get a lower interest rate or more favorable terms in general, rather than dealing with a "take it or leave it" situation. Don't hesitate, then, to put your negotiation skills to use when securing your business loan.
Forgetting A Detailed Business Plan
On the other hand, don't expect any potential investors or lenders to take you seriously if you don't have a detailed business plan that you're prepared to present and share with them. Lenders want to make sure you have a viable, legitimate business plan so that they can rest assured that the money they invest in your business will be well worth it.
Waiting To Request Important Documentation
When applying for a business loan, there's often a lot of documentation that's needed to be submitted with your application, such as tax transcripts and business receipts. So if you're missing any important documents needed for your application, be sure to request them before you get started with the loan process, as they can take awhile to show up.
Forgetting That Time is Money
Last but not least, remember that time is money in the business world. Some lenders are faster than others at approving and processing a business loan, so it may be worth taking a .02% higher interest rate to borrow from a company that can have the funds available to you in 24-48 hours as opposed to a couple of weeks.
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