• WomELLE
  • Contact Us
  • Writers
  • Write For Us
  • Submit Article
No Result
View All Result

No products in the cart.

  • Login
WomLEAD Magazine
Podcast
SUBSCRIBE
  • Home
  • Magazine
  • Business
  • HER Story
  • Founders & CEOs
  • Leadership
  • Mentoring
  • Women
  • Wellness
  • Home
  • Magazine
  • Business
  • HER Story
  • Founders & CEOs
  • Leadership
  • Mentoring
  • Women
  • Wellness
No Result
View All Result
WomLEAD Magazine
No Result
View All Result
Home Business
Best Small Business Loan

How to Select the Best Small Business Loan 

The Editorial Team by The Editorial Team
November 23, 2022
in Business
Reading Time: 4 mins read

An entrepreneur might have a lot of great, but none of them will materialize unless they are backed by proper funds. This is something every small business owner realizes. In order to make money, they must need money as well. And since most of them do not possess that kind of capital, their only option is to borrow the money. However, most small business owners are confused when it comes to choosing the ideal small business loan.

If you are troubled with questions like how to get a small business loan or how to apply for one, here are six key aspects you need to remember before getting a small business loan. 

1. Loan Amount 

First and foremost, you must be specific about the loan amount. You must be clear about the number of liquid funds you want. You also need to be realistic and flexible while mentioning the loan amount you are looking for in the application form. It is also likely that the lenders are going to check your records as well as the growth potential of your business. The loan amount is much more likely to decide your ideal lender. If your lender sanctions too small an amount, your needs may not be fulfilled. Therefore, you must be sure about the amount likely to be approved by each lender.    

2. Loan Cost 

Most people only consider the interest rate while getting a small business loan and ignore the total cost of borrowing. While the interest rate is a significant factor that determines the cost of borrowing, it is not the only one. You must also ask your lender about the Annual Interest Rate (APR). This includes all the fees and charges like documentation, origination, etc. One must also be careful about the penalties. Therefore, you must compare every aspect of the cost of your loan before finalizing one.  

3. Mode of Disbursal 

Most business loans usually come in two modes of disbursal – an installment loan and a line of credit. In the first mode, the entire loan amount is disbursed at once. The lender deposits the whole amount to the borrower’s bank account. In comparison, the line of credit mode of disbursal involves a revolving credit where the borrower can withdraw only up to the maximum limit.  

ADVERTISEMENT

Your preferred mode of disbursal depends on your need. If you are looking for a lump sum amount, you may opt for an installment loan. On the other hand, if you wish to have your money in small parts, you can go for the line of credit mode of disbursal. Therefore, you must be clear about your needs and preferred mode of disbursal before finalizing your loan.     

Read Also: Startup Business Loan Options for Entrepreneurs

4. Fund Use 

In most cases, the lenders are going to ask you about the use of the required funds, so you must be ready with a convincing answer. Since the approval of your loan amount ultimately rests with the lender, you must convince him that you are going to use it in a productive manner. On the other hand, if the lender feels that you are clueless about using your loan, it is highly likely that your loan will not be approved. Therefore, try to find a lender who understands your business vision and is more likely to help you financially.     

5. Collateral  

You must keep some assets as collateral if you wish to secure a business loan. From your residential property to your office to inventory, you must collateralize something to avail yourself of a business loan. Some lenders also accept your business’s future revenue, like future sales or account receivables, etc. Therefore, you must approach a lender who finds your assets valuable enough to keep them as collateral.  

6. Sales Revenue  

Your sales revenue is an essential factor that will be considered during your loan allotment process. Your sales revenue determines the creditworthiness of your business. Lenders might consider you a high-risk customer and impose a higher interest rate on your loan if you do not have promising revenue. In such a case, acquiring a loan at competitive interest rates might become difficult. Therefore, if your sales revenue is down, you must declare this fact well in advance to acquire the best possible loan for your business.   

If you are looking for a small business loan in the initial stages, you must be very careful. If you make the wrong choice, you may end up in a situation where you are unable to pay off your loans. Therefore, it is better to conduct some research on your end and find the best possible small business loan option for your business. The correct loan option will support your business journey and help you become an established entrepreneur. 

Tags: best business loanchoosing the right loangetting a small business loanhow to apply for a small business loanhow to get a small business loanloan for small businessSmall business grants
Share36Tweet22Share6
The Editorial Team

The Editorial Team

Hi there, we are the editorial team for WomELLE to help you succeed in business. WomELLE is a community working to support women by helping them achieve their business goals through specialty services, leadership, mentoring, and networking. The magazine "WomLEAD" is to help you succeed as an entrepreneur, business owner and leader.

Related Posts

10 Startup Business Ideas to Explore in 2023
Business

10 Startup Business Ideas to Explore in 2023

March 20, 2023
Top Ways Listening Can Grow Your Business
Business

Top 5 Ways Listening Can Grow Your Business

March 15, 2023
The Importance of Having a Sisterhood
Business

The Importance of Having a Sisterhood

March 14, 2023
Next Post
Financial Confidence 

How Women Can Increase Their Financial Confidence 

Women on Boards

Big Investors Did More Than Quotas to Get Women on Boards 

Taneia Surles: Written Pursuit of Wellness

Taneia Surles: Written Pursuit of Wellness

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms & Conditions and Privacy Policy.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

WomLEAD Magazine

A print and digital magazine for businesswomen focusing on leadership, business, and entrepreneurship that made its debut in 2017 has WomELLE Magazine.

Follow us on social media:

Recent News

  • America’s 10 Most Successful Businesswomen
  • Ayoka Essentials Founder Epiphanie Yohou Promotes Sustainable Products and Giving Back to the Community
  • Tess Cox and Chelsea Cox Gillman: A Mother-Daughter Duo Coaching Executives and Teams Toward Stronger Leadership

Category

  • Business
  • Female Founders
  • Founders & CEOs
  • HER Story
  • Leadership
  • Mentoring For Women
  • Wellness
  • Women Today

Recent News

America’s 10 Most Successful Businesswomen

America’s 10 Most Successful Businesswomen

March 20, 2023
Ayoka Essentials Founder Epiphanie Yohou Promotes Sustainable Products and Giving Back to the Community

Ayoka Essentials Founder Epiphanie Yohou Promotes Sustainable Products and Giving Back to the Community

March 20, 2023
  • About
  • Contact
  • Privacy Policy
  • Terms & Conditions

© 2023 WomLEAD Magazine from WomELLE, Corp.

No Result
View All Result
  • Home
  • Magazine
  • Podcast
  • Business
  • Founders & CEOs
  • HER Story
  • Leadership
  • Mentoring
  • Wellness
  • Women Today

© 2023 WomLEAD Magazine from WomELLE, Corp.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?