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5 Questions Before You Take Out A Business Loan

5 Questions Before You Take Out A Business Loan

Congratulations! You’ve decided to take out a small business loan. This is a big step in your financial history and career path, and we are happy to be along for the journey.

The questions we share in this article will help you consider everything you need to before you apply. If you are ready to take the next step towards a creative and empowering financial future, it’s time to begin to ask yourself …

1. Why should the lender give me money?

This is an important one! As like anything in life, when you learn to think from the other person’s perspective and prepare for their answer, you are more likely to get the answer you want. Being intuitive goes a long way in business. Consider every question they may ask you or character traits you have they may inquire about. When it comes to this question, sell yourself and sell your business just as well. Be confident in your lending inquiry.

2. Am I applying for too much or too little money?

Don’t undersell or oversell yourself. You don’t want to apply for more than you have projected. When you develop a sturdy business plan, you should not run into this problem, so if you have done your homework, this question should be easy to answer. Ideally, you’re answer should be, “I’m applying for just the right amount.”

3. What “mistakes” will show up on my credit history?

Have you already applied for small business loans elsewhere and been rejected? Have you closed a few credit cards recently, or missed payments? Have you recently taken out a home loan? There are so many things that can impact your credit score, and lenders will look at this information before they sign on the dotted line.

Consider if this is a good time for you to start a new venture and get a small business loan before you seek out lenders. You want to be sure you have built up your reputation and credit score before you seek out a small business loan lender. Poor credit will not get you the loan you need.

4. Am I seeking out the right type of financial services provider?

If you’re looking for a small business loan, you want to go to a financial services provider that understands your objectives and needs. For example, it’s well-known that when it comes to small business loans, often, small banks are likely to be of more help than chain national banks.

Be sure to “shop around” and do your homework when it comes to seeking out a small business loan lender. The place you may end up getting your loan from might have been a small business itself back in the day. Do your homework, and prepare, prepare, prepare! This is your life we are talking about, and you want to be sure to carefully consider all the steps for your small business’ success plan.

5. Have I planned for my financial future well?

Once you sign on the dotted line, consider your payment plan moving forward. When you’ve mapped out your estimated profit and projections, you should have also mapped out your plan to pay back your loan. Be smart about your finances from the get-go. Watch for cost-saving opportunities along the way and solicit help from community members or friends and family where you can. With business, there are always clever ways to save, but, when it comes to paying back small business loans, the answer is black and white: develop a plan, meet your monthly payments, and be confident and successful with your small business plan!