If you are looking to get loans for your business you will want to understand some of the basic steps to get started. Before you even start to look at how to get a loan you should ask yourself two questions. One, do you really need one? Are there other better options, such as venture capital or borrowing from family or friends that you should consider first? Two, are you being realistic about how much you need to borrow. There is a tendency to concentrate on how much you are able to borrow, and not how much you should. Just because you get approved for $100,000 doesn't mean you should. What will you spend the money on, how will you repay the money, and how much value will this add to your company? These are the questions you should ask yourself.
If you decide that pursuing loans is a good idea for your company, you need to see if your company has the capacity to borrow, or if it does not have enough of a credit score and you will have to guarantee the money borrowed yourself. If you do have to personally guarantee the loan, is this activity worth the personal risk? How much confidence do you have in the success of your plans and your ability to repay what is owed. If you aren't willing to take this risk, you shouldn't borrow any money.
How does the amount borrowed affect the interest rates you can get for loans? Sometimes quite a bit, it may seem counter intuitive but if you want to borrow more money often you must pay a slightly higher interest to offset the risk. This isn't because they expect any one company to fail at repayment, but because they consider you a small piece of a pool of borrowers, some of which will default, and some will repay in full.
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