But worry not, this isn’t one of those articles that gives you vague answers and aphorisms about how each business loan is as unique as your business is (even though that’s true). Instead, we’re going to point you towards helpful resources and give you some points to consider because we know that if small businesses thrive, so does the economy.
Keep Your Mind (And Your Options) Open
If you’re like most small business owners, chances are you’ve entered into this process with a specific bank or loan product in your head. Because SBA loans are the most well-known, many business owners start by seeking out that type of funding. That’s great, as long as you don’t stay married to it just because it’s the one you’ve heard of.
Through our lending marketplace, we offer 10+ types of funding from more than 75 lenders. These options increase your likelihood of finding funding that’s tailored to the needs of your business—and for some businesses, that need can be as simple as qualifying for capital after a rejection.
The first key to choosing the business loan that’s right for you is to keep an open mind so you can better weigh the pros and cons of each lender and each loan.
Get Expert Advice
The next step is to get expert advice. Maybe you’re best friends with Warren Buffet, in which case you should definitely ask him for help. If you’re not (don’t worry, we aren’t either), then you want to take advantage of the resources you do have.
Consult your network for advice. Friends in finance may be able to help you cut through some of the financial jargon, something we try to do on the reg with everything from quick answers to blog posts and comprehensive guides. If you know business owners who have gotten funded, they may be able to tell you about their specific loans and what they think of them, though they likely won’t be able to help you compare as many products and lenders.
That’s where we have you covered. We know that not every small business owner has a financial expert on speed dial, so we have a team of dedicated funding managers ready to answer every question you have. Funding managers have built expertise in small business financing by working to fund business owners in every industry with all of the options in our marketplace.
This experience means they won’t just answer your questions—they also know the right questions to ask you to help determine the right type of loan. They’ll talk with you about your business and help you understand your loan options.
They’ll even make your case to the lenders for you. Since funding managers have lots of practice, they know how to best communicate with lenders— what information you should share and what turns of phrase will make lenders unnecessarily worry. Imagine if you had a professional who could go to a job interview and tell your potential employer why you’d be a great hire. You’d be foolish not to use that ace up your sleeve. We believe advice should be free, so ours is. We get paid by the lenders, so you won’t ever pay Lendio a dime for our help— even if and when you get funded.
How do you access this awesome free advice? Fill out a 15-minute application, then your funding manager will come to you. It’s like that line from Field of Dreams, “If you fill it out, they will come.”
Get by with a Little Help from the Tech
Our algorithm is magic, not just because of the way it pairs you with loans you’re likely to qualify for before you even apply for them (yeah, it does that), but because of how much it considers. Lenders who receive high borrower reviews are rewarded by the algorithm. It’s like lenders have their own lending score the way you have your credit score.
Questions to Consider to Help You Choose the Right Loan
Whether you’re embarking on this quest with help (highly recommended) or on a (Hans) solo journey, there are a couple of questions that you can keep in mind to help you find the right loan product.
Prioritize which Loan Features are Most Important
What’s most important to you: speed of funding, loan amount, or interest rates? Generally speaking, you can pick 2. Knowing what your priorities are for the financing process will help your funding manager point you in the right direction.
What Are You Going to Use the Capital For?
There are specific forms of funding for some expenditures. Accounts receivable financing is great for payroll. Equipment financing can help you make large equipment purchases like financing a tractor or purchasing a commercial oven. But did you know it can also be used for purchases like computer equipment and office furniture? Business acquisition loans can help you purchase a new or existing business.
If you haven’t already, develop a clear idea of how you’ll use the capital. It’ll smooth out the funding process in more ways than one.