Financing Your Business Operation: What Qualities Do You Want in a Lender?
You have all the plans defined for starting your new business. The only thing that remains is to secure the money needed to launch the business and get you through that first year of operation. This is where you want to look closely at which lender would provide a loan that benefits the business on more than one level. As you begin to check out loans from Mogo and other worthy lenders, keep these qualities in mind.
A Solid Reputation
Doing some background checking on any lender under consideration is a smart move. As impressive as their loan packages may seem to be, they are less than worthless if the lender is known to not live up to what is promised. Look past the promises and find out how well the lender does at fulfilling them. If the information you learn indicates there are consistent challenges that the lender brushes off or downplays, take that as sign to look for financing elsewhere.
Terms and Conditions That Are Easy to Understand
Loan terms and conditions do include terminology that must be present in order to comply with current financial regulations. Even so, those terms and conditions don’t have to be overly complicated. There are lenders who ensure the terms are in line with current regulations and are organized in a way that makes them easy to understand. When you find that identifying what’s in those terms does not require you to ask questions about every other sentence, that lender is worth considering.
A Minimum of Fees and Other Add-Ons
Always pay close attention to the schedule of fees and charges included in a loan contract. You want to know exactly how much the loan will cost you in the long run. Be aware that some lenders include fees for just about everything, including processing your installment payments. Others have simpler fee structures. Your goal is to understand what fees and charges you’re committing to make and determine which lender offers options that are relatively free of add-ons and multiple charges.
Excellent Customer Support
Even though you don’t anticipate needing to contact a support team often, it’s nice to know they are there and ready to help. As you investigate the background of any lender, find out what others think about the level of service and support they do receive. You want to know that if a question comes to mind or if you have some concern, it’s taken seriously and addressed in a reasonable amount of time. When you notice that past customers have the same unresolved issues with customer support, that may be a sign you should talk with a different lender.
No Penalties for Early Loan Settlement
As you compare terms offered by different lenders, you’ll find that some of them offer no incentives to pay your debt earlier than the agreed upon date. In fact, they may penalize you if the balance is retired early. In some cases, the penalty for early loan settlement is so significant that it wipes out any benefit of paying off the loan in advance.
When possible, try to work with a lender who does not assess any charges for paying the loan off before the original due date. This positions you to do so in the event you have an increase in business volume and want to get rid of as much debt as possible.
Now that you know what you want, it’s time to identify a few lenders who are likely to be interested in doing business with you. Make sure that you compare business loans offers from trusted lenders only, and look closely at what each one has to offer. Your diligence now will pay off in creating a relationship that will serve you well now and in the years to come.