In recent decades, there has been an explosion in the number of business loans. No matter where you are, you can find many different options. There are also many types of loans to choose from, from different lenders, with different rates and terms.
If you want to give your business the capital it needs, it’s best to take a moment to think it through. Choosing one business loan over another can end up saving you thousands of dollars.
Let’s go over the key parts of a loan to pay attention to. Then we will go over some examples of how to compare different lenders and loans.
Things to Pay Attention to When Comparing Business Loans Online
Let’s start with the basics. These are the key aspects of online business loans that affect your bottom line.
Business Needs
There are quite a few different types of business loans:
- Business term loans.
- Business lines of credit.
- Equipment financing.
- Microloans.
- Business startup loans.
- Working capital loans.
- Bridge loans.
- Commercial mortgages.
While most of these business loan types have some similarities, there are differences when it comes to collateral, expected rates, and other aspects. But there is also some overlap; you can take one type of loan for different purposes.
Look into how each business loan type works and then decide on one of them.
Lender Reviews
You can find reviews of online lenders throughout the internet. There are lender-specific review platforms and forums. Or there are also broader review platforms where borrowers may have left their opinions or experiences.
You can also look on forums or Q&A platforms like Reddit or Quora for borrowers’ opinions. Look for common threads to help you form your judgment.
APR
The Annual Percentage Rate (APR) of a business loan is the total percentage-based cost of borrowing for a year. This is a standard measurement for loans, and it covers the interest rate plus all additional fees or charges.
There are differences in interest rates, and you may pay a different amount based on your repayment term or other fees you are charged. But your APR is the best baseline for what you can expect to pay in total given the sum of money you are trying to borrow.
After looking at each loan’s APR, it makes sense to start looking into other details.
Associated Charges
Business loans can look expensive or cheap on the surface. But you need to consider how certain charges factor into the equation.
Look for any of the common charges:
- Processing fees.
- Late payment penalties.
- Prepayment penalties.
Some of these charges may affect you in unexpected ways if you do not understand the terms. For example, if you think you may change plans and possibly pay off the whole loan early, a significant prepayment penalty can
Customer Service
The lender’s customer service can become important quickly if you end up having any questions or needing support. Look into their customer service reputation, contact methods, and availability.
In addition, consider the user interfaces and ease of use. For example, if they have a good app and repayments are seamless, you’ll have a less stressful time after you’ve taken the loan. Ideally, it should be easy to check the status of the loan, make repayments, and ask questions.
Your Business Qualifications
Of course, your own business qualifications will largely affect how your repayment process goes. Consider which lender is willing to offer the best rates for your:
- Turnover.
- Business and personal credit.
- Collateral.
- Business plan.
- Debt to income ratio.
Compare Local Lenders
Speaking of your qualifications, it’s a lot easier to compare your local lenders using a business loans platform. These platforms add even more speed and convenience to the process. For example, you can get prequalified for a loan in the UK, Germany, France, or the Netherlands in under 24 hours.
Once you’re prequalified, you will be given the chance to explore all the available lenders and their offerings on your own time. You can look over all the details we’ve gone over in the above section. This is how you can make the most out of the online business lending industry and get the financing you need.
