In determining which lender is best suited for your business, there are a variety of factors to consider along with your complete business evaluation and finance statement. Budget, how much money you need, what type of business you have, and how much you’re willing to pay per month are just among the included necessary factors to consider before determining which lender to go with. Knowing which types of lenders there are is also necessary in determining you lender needs. Of course, there are bank, credit union and alternative lenders, knowing which one that will serve to be of the greatest benefit to your business is crucial.
Accion is an alternative lending source specializing in small businesses just starting out. It offers its program to those new businesses of six months or younger. The common loan requirements for Accion include:
- Having a credit score of at least 575
- Sufficient cash flow
- Proof of income
Loans within this lending source range anywhere from $10,000 to $100,000 and applicants are usually approved within one month. The annual interest rate starts off at 10.99% and will be paid within each month of the loan. If you’re a small business owner having trouble acquiring a traditional restrictive bank loan, this lending source may be just right for you.
Wells Fargo is a great traditional bank lender for those both small and established businesses, offering long-term and lump sum loans. Wells Fargo has a considerably high approval rate and low interest starting at 6.50%. This lending source is backed by The International Small Business Administration (SBA), ranking as the top lender for SBA lending. For those established businesses looking for a large commercial capital, Wells Fargo provides lump-sum capital at a longer loan finance term than competing lenders.
Credit union lenders are subject to the borrower’s state, since members of a credit union share some sort of common bond like working for the same employer. If a credit union lending source deems right to suit your business loan needs, you’ll need to acquire a credit union membership. In order to be a part of a credit union, you’ll need to share some sort of common bond – as mentioned working for the same employer – or having some other form of business connection with existing members. Ensure that you make all of your promised payments efficiently as with every other loan type, or you could lose membership in the credit union which could negatively affect your business credit score.
Small business lenders come in many different forms as the ones mentioned above, or even in other business owners and connections. Whichever lender you decide on, it’s important to understand the fundamentals in every lender in these subcategories. Ensure that you’ve completed a demonstrative finance statement and business evaluation before communicating with any lender. Knowing your credit and business alike will make the overall process of finding a lender easier and less stressful. Going the extra mile for determining which lender you need will be beneficial in the long run of acquiring a business loan.
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