Obtaining funding for your small business should never be a decision to take lightly. However, with so many products on the market today, it could take you a lot of time finding the right business loan to suit your needs. This is where a business loan broker can be extremely valuable--they will work closely with you to determine your business needs and help you to find the best lender and product available.
However, it's important to know that the business loan broker industry is not currently licensed or regulated. In fact, anybody could become a broker tomorrow. For this reason, it's important to ask the right questions before using the services of such a professional to ensure you're getting the best service possible.
1. How Can You Help My Particular Business?
Whether you're a startup or established business, any loan broker you use should have experience in dealing with a wide range of business types and structures. This will ensure they help you choose a product that suits your individual requirements.
2. I Have No Credit History. Can You Help?
No credit history could mean you are refused credit from traditional business loan lenders. Online loan brokers can offer a number of alternatives, such as using a personal loan or using a community bank that will help you to build a good credit history.
3. Can You Get Me the Best Rate?
Good online business loan brokers have invested in software that gives them a whole-of-market view. Others have trusted partnerships with a wide range of reputable lenders and will pick and choose which lender is right for you based on your individual needs.
4. I Have Poor Credit History. Am I Doomed?
A poor credit history can be frustrating, but it doesn't have to kill your dreams. There are many products that are designed to help you rebuild your business credit, and your broker should be able to find these for you with ease.
5. What Is the Total Cost of My Loan?
Don't sign anything until you know and understand how much your loan will cost you. You'll need to know the total cost, the monthly cost and also the cost of any interest on the loan. Read the small print to ensure there are no hidden charges.
6. Are Your Costs Payable by Me or the Lender?
Many brokers offer their services for free or a very low rate and make their profits through the product commission they earn. It is important to ask this question early in proceedings so that you are not landed with an unexpected bill. Original Funding, for example, takes no fees from borrower's.
7. Are There Any Downsides to the Loan?
Asking about any downsides will ensure you enter your loan agreement with your eyes wide open. Ask to see a copy of the loan agreement and to be given time to consider the details before you sign anything.
8. Is There a Cooling-Off Period?
Found the money you need elsewhere? Having second thoughts about getting into debt? It's important to know whether your loan has a cooling-off period so that you can void the agreement without consequences if you change your mind.
9. Will You Share My Information With Third Parties?
The last thing you need after taking out a loan is companies calling you to take out more funding or buy similar products. Unfortunately, some brokers will pass your details on to third parties. Ask your broker to exclude you from any further communications.
10. Is My Information Secure?
During the data collection and application process it is essential that your personal and financial details are kept secure. Most brokers will use an intermediary secure portal to complete your application, therefore keeping your data safe.