Sometimes, as we work with business owners here at LenCred and go over their borrowing options, I’ll get this question:
“Well, can’t I just go out and get a loan myself?”
The answer is yes — of course, you can try to find a loan on your own. But if you do, it will probably take quite a while, and it’s unlikely you’ll get the very best loan option that is available to you.
Why is that? Because you’re not a finance-industry professional, and you probably aren’t aware of all the possibilities.
A finance pro will look at your entire credit history, and your business’s. They will learn about your situation, why you need the money, how long you need it for, and exactly what you plan to do with the money. All of those factors affect what type of loan you might be able to get, and at what terms and interest rate.
Maybe you have collateral that you are in a position to pledge against the loan. A finance pro could help you evaluate whether it would be prudent to risk those assets by using them to guarantee a loan. If so, and you want to put up that collateral, your loan costs will likely be lower.
There may be creative options you haven’t considered such as selling receivables, also known as factoring. These days some business owners are even getting high-interest loans against confirmed purchase orders, when they have no other way to finance manufacturing of presold merchandise.
If you have bad credit, you may think a high-interest, unsecured loan is your only choice. But a more affordable business line of credit might be available — if you know where to look. There might be only a handful of lenders in the country that would be willing to work with you.
Out of the thousands of lending institutions in the country, how would you locate them on your own? Likely, you wouldn’t. Or if you could, how long would it take you to find them, versus using a seasoned financial professional who knows all the players?
Working with a professional saves you time and helps you discover all the possible ways you could borrow for your business. Interested in locating the best small business loan option for your situation? Give me a call — I’m happy to help.