Questions to Ask Yourself and the Potential Lender before Getting a Business Loan

Questions to Ask Yourself and the Potential Lender before Getting a Business Loan

Getting a loan is a critical decision, but it must be considered for the sake of your business. You must know that businesses have more financing options these days. With this, it’s important that you know what you’re getting into at the onset.

What to ask yourself before taking out a loan
Before you consider the best small business loans in singapore, here are the questions to ask yourself:

  • What do you need the extra capital for? It should be clear from the beginning that

you know your needs. The purpose of your loan can help identify whether you’re trying to fill a long-term need or just a short-term one. At the end of the day, you will also identify the term of the loan to meet your needs.
• How much money are you looking for? Many business owners these days believe that a lot of money will solve their problems. With this, they grab any opportunity allowing them to borrow more. This is not a good idea. It’s important that you go through the loan purpose because it dictates the answer to this question.
• What does your credit profile look like? Keep in mind that your credit profile can make a difference – whether it’s your business or personal credit score. These are important because it can dictate where you will find success in looking for a loan. The lender will measure how your business meets the obligations through this.
• How quickly do you need the funds? Finally, you should ask yourself when you need the funds. Is it immediate or can it wait for several weeks? This is vital because there are lenders that take time processing the loan applications.  

What to ask the potential lender before finalizing the loan
Now you’re ready to talk to a lender. This can be a challenge because there are many lenders out there. It’s important that you find the right one. To help you get started, here are some questions to ask potential lenders:

  • Do you offer a loan that suits my business needs? The first thing you need to ask a lender is if they provide a loan that suits your business needs. Since you already know what you’re looking for (either a short-term or long-term loan), you can ask a lender if they have something for you in support of your purpose.
    • What are the interest rates and the cost? You must know that not all lenders have the same interest rates and total cost. If you know the interest rate and the cost, it will be easy to compare and assess your financing options.  
    • What are the forms of payments? Some lenders still accept paper checks while others consider automatic debits from your business’ bank account. You need to know the forms of payment so you can conveniently decide what is best for you.
    • How long will the process take? Finally, you need to ask the amount of time they can process your loan, especially if the need is immediate. The processing time will depend on the lender – it could take anywhere from a day to several weeks or even months.

Getting small business loans is a major milestone because there are many things to go through; seeking financing to putting together loan application and growing the business. It can be indeed daunting and time-consuming but if you prepare mentally before applying, the process can be painless.

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