What Should You Consider While Applying for a Business Loan

[Mika]

If you want to start a business but do not have money or your friends and family are not willing to lend you money, the only option left would be to get a loan from a bank, investment company or any kind of financial institution.

When applying for loans, you will have to consider a lot of things. Firstly, be aware of the interest rates. How much you are supposed to pay and whether the company will increase the interest rates. Some lending companies may increase interest rates after loan approval. Secondly, assess your ability to repay the loan. Last but not least, consider the duration of the loan term.

 

[Yusra3]

When applying for a business loan, key considerations include if the purpose and amount aligns with both immediate needs and long-term projections, if you qualify based on time in business, personal credit score, collateral, and annual revenue/expenses, if the loan terms and rates fit repayment abilities, if better SBA-backed options exist, and whether the lending relationship could support future financing needs allowing the business to scale.

 

[Etini]

The first things that I consider when thinking of a business loan are repayment duration and the interest.

If the repayment duration is too short, it would put a lot of pressure that might end up choking the business. I always advocate for business loans with longer term repayment period to help the business adjust.

And then the interest is also a factor that I consider deeply when applying for a loan. If the loan has a relatively higher interest that is unrealistic for the business to meet up, it is a no case. A loan for me should never have interest in double figures.