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5 questions you need to ask when looking for the best business funding lender

Monday, March 05, 2018

Opportune and timely finance is the key to making the most of business opportunities. While finances can be tailor-made to meet unique business needs of varied business models, what must remain constant is complete transparency, good response and competitive interest rates. This is where selecting an apt business loan lender comes into the picture. Read on to know the 5 criteria you need to stress on before selecting an SME loan lender for your next business project:

How experienced is the lender?
Selecting a business funding lender should be based on more than just the lowest rate. Most small businesses can benefit from the expertise of a veteran lender. Just like an SME loan lender gauges the experience of the entrepreneur, similarly, as a business person, even you should choose a lender who has not only a history of healthy customer dealings but also the adequate knowledge to assist you through every step of the process. This is why it helps to know what kind of an experience the lender has.

Is the paperwork all in place?
Licences, especially in matters relating to finances, always safeguard your interests in the best possible way.

An authorised lender who offers business funding to any individual or organisation must hold a commercial lender licence. To the borrowers, such a licence assures an efficient and stress-free experience. Dealing with a licensed lender also prevents misuse of the borrower’s personal information, and ensures a smoother and worry-free loan application and repayment process.

Are the testimonials positive?
References always offer an extra level of security. Lender reviews, due to their great insight, can be incredibly useful to help you choose a particular lender. If previous clients found the lender difficult to reach after promising business funding or gave them a hard sell, you may want to look for someone else.

Making an informed decision by talking to someone who has had a previous experience with the lender you are considering is the greatest favour you can do to your company’s financial health.

What procedure does the lender follow?
As a borrower, it is not healthy if the factors that determine a lender’s interest rate remains a mystery to you. It is imperative that you know the SME loan lending landscape and approve of the procedure that the lender follows while deciding the interest rate. Some lenders charge different interest rates to different customers, largely depending on the customer’s credit score and the type of SME loan required. Knowledge of these procedures can benefit you as a customer and ease the uncertainty that may be involved in applying for a loan.

How long will it take to get the loan approved?
Time is money. While a lot of lenders promise speedy loan processing or a near-immediate approval of your loan application, the full process takes considerable longer. Take time to learn about the disbursement turnaround time and services involved, and then assess whether this lender suits your business plans or not.

While all the above factors can assist you in zeroing down on your lender, start your search with evaluating the offerings and comparing the same with others. The above 5 questions will certainly assist your final search for the most appropriate lender for your business funding.

"By association with Digikredit Finance Pvt Ltd , an NBFC, which operates under the name  SMEcorner and offers credit to small business owners."

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