If your business needs to borrow money, you’re not alone. In 2021, small businesses borrowed $44.8 billion through more than 61,000 loans. However, not all businesses look to traditional lending options like banks for financial support. In fact, there are countless other options available for getting a business loan. The key to picking the right one is to understand your business’s needs while staying aware of what’s out there.
To make sure you pick the right lender for your business, you’ll want to avoid making these 5 mistakes:
Not staying on top of your credit score.
It doesn’t matter who you are, your personal and business credit score will come into play when applying for a loan. Lenders consider your personal credit score because it represents your creditworthiness. It also shows your ability to pay your debt back. A score of 700 or higher is usually considered a good personal credit score.
Your business credit score will typically range between zero and 100 but a score of 80 is a good score.
You can check your personal credit score with:
You can check your business’s credit score with:
- Dun & Bradstreet
So what happens when you or your business have a lower credit? In cases like these, you may struggle to get financing from traditional lending options like a bank. For instance, say you were late on a few loan payments for your bank loan from last year. Now, you can’t qualify for another loan with them because your credit went down. This can cause your business financial strain. As you spend time searching for a new lender you may not be able to:
- Buy necessary equipment
- Stock your shelves with inventory
- Pay your employees
This can lead to:
- Falling behind competitors
- Not meeting customers’ expectations
- A lack of growth and expansion in your business
Bad credit doesn’t have to stop your business from succeeding. Lenders like FundBox can offer you a loan even if you have a lower credit score. In fact, they strive to support businesses with low credit. This means you’ll not only have a shot at getting the funding you need but you can improve your credit score with each payment you make.
FundBox also doesn’t just focus on your credit score when they evaluate your business. They review your business’s transaction history and data thoroughly. According to FundBox, this information is more relevant to your business than a credit score.
Other perks of getting a loan with FundBox include:
- Getting a credit decision in under three minutes
- Getting funds the next day after applying
- Only paying for what you use
All of these benefits add up to one result – a thriving business. You’ll get the funds you need to grow and expand your operation in no time. They’ll even reward you with money savings if you repay your loan early.
Not researching credible lenders ahead of time.
Instead of waiting until hard times hit your business, you want to have research done on lenders ahead of time. This can save you stress and ensure you work with a lender that has a good reputation.
For instance, say your ice cream shop makes the majority of it’s sales in hot summer months. Based on last year, you already know your shop makes enough in sales from June through August to cover your business expenses all year. But what happens when it rains all summer and customers stop coming? If you don’t get enough cash flow to cover your expenses quickly, your business may have to shut down. In a situation like this, you need to take out a loan quickly and work with someone you can trust.
If your business needs a credible lender that can provide cash fast, consider BlueVine. Not only has BlueVine received an A+ rating from the Better Business Bureau, but they have countless reviews from happy customers.
BlueVine can approve your business for a loan in as little as five minutes. They also offer:
- Business loans up $5 million dollars, ensuring you can get enough cash to cover your seasonal dip in sales.
- Interest rates as low as 4.8%, which help keep spending money in your pocket
- Advisors that can walk you through the whole process and help you get the funds you’re looking for
- Online applications so you can get started anywhere
If your cash flow dips, lenders like BlueVine can help you cover necessary expenses all year, like:
Not realizing there are flexible payment options.
When you’re in a pinch, a loan can provide the funds you need to improve productivity and survive. However, before you rush into getting a loan you want to make sure you can pay if off later with a repayment schedule that fits your business. Otherwise, you can risk getting locked into a payment schedule that you can’t keep up with. When this happens, you risk:
- Damaging your credit
- Owing more money as interest accrues
- Reducing your paycheck to pay your bills
These can all lead to business failure.
Fortunately, you can avoid this by looking for a lender that offers payment flexibility like Biz2Credit. Advantages of getting funding with Biz2Credit include:
- Loans as big as $5 million depending on what you choose. This ensures you can get enough money.
- Loan terms going beyond five years, depending on what you’re looking for.
- Quick deposit of funds, to keep your business going and avoid stress.
With Biz2Credit, it doesn’t matter if you choose a business loan or line of credit. Your business will be able to get the money it needs to operate on a payment schedule that works for you. This means you can take longer than five years to pay back your loan. You won’t have to stress about paying in a shorter time than that, unless you want to.
Getting the funding your business needs doesn’t have to be stressful, time consuming or an unpleasant experience. With the right planning and research you can narrow down lenders that fit your business perfectly. So before you rush into signing on the dotted line for any loan make sure you look at what they offer in detail.