4. Research and Compare Lenders
Depending on your personal and business qualifications, you may qualify for a startup loan through multiple lenders. To identify the best startup business loans hop over to the web site for your needs, consider these factors when comparing lenders:
- Annual percentage rates. In general, business loan APRs start around 9%, but rates may be higher for startup business loans, and they can even be lower for the most qualified applicants. Visit each lender’s website or contact a customer support representative to determine available APRs.
- Fees and other costs. Business lenders often charge origination fees ranging from 3% to 5% of the total loan amount to cover the costs of handling paperwork and verifying application information. Others also charge prepayment penalties for borrowers who pay off their loans early or late payment fees for those who miss their due date. These fees can increase the overall cost of borrowing, and some lenders eliminate them to remain competitive.
- Lender reputation. Even if a lender looks good on paper, take time to read online reviews to evaluate its reputation among current and past borrowers. Likewise, reach out to other members of your business community to learn about others’ experiences with the financial institution. Consider choosing another lender if your research reveals any red flags, like negative customer support experiences.
5. Submit Your Application
Once you choose a lender, familiarize yourself with its application process and make sure you compiled the correct documentation. Application and underwriting processes tend to vary by lender, so look into whether you can apply online or via telephone-or if you’ll need to visit a branch. After you submit your application, a lender representative may contact you to request additional documentation such as proof of collateral or further financial records.
If you’re rejected for a startup business loan, there are a number of things you can do to fund your new business.Read More