Securing financing to start your small business can be an arduous process. As with any financial dealing, the small details matter, yet sometimes these details can be the confusing part. The most important time to have any confusion addressed is, of course, before you sign on the dotted line. Here are some questions to consider as you prepare to seek and secure business lending in Springdale, AR.
What Is the Actual Cost?
Processing, underwriting and document preparation for a business loan can all carry extra fees, so be sure to ask about hidden costs in your financing package that go beyond the principal amount and interest. If a fee seems unclear to you, be sure to ask for clarification or even to have that fee waived. Remember, these charges add up! Don’t neglect to ask exactly how much will be due at closing.
What Are the Long-Term Loan Requirements?
More than often, loan agreements are conditional. For example, you may be obligated to acquire a specific amount of insurance or open an account with the lender. If these conditions are not met, the loan will technically be in default. Before you finalize your loan, make sure you understand everything that is expected over the entire lifetime of the loan. Just like fees, these conditions should be negotiable.
Is Collateral Necessary
Some lenders ask that borrowers use collateral – personal belongings or property – to ensure their commitment to the loan. If you were to default on your loan, the bank could seize your collateral as reimbursement. Be sure that before everything is signed, you understand what belongings of yours are on the line.
Can I Pay My Loan Down Faster Than Planned?
Most lenders prefer a loan package that includes prepayment penalties. This means that if you want to pay your loan down in advance, you will be charged a fee for doing so. Obviously, this is a big advantage for the lender, but not good news for you. Negotiations may yield more favorable terms for the borrower.
Get Answers With Lendio
Got questions? We’ve got answers. At Lendio, we help business owners find equipment financing in Fayetteville, AR, and other types of business financing. Call Brady Blake at our Northwest Arkansas location at (479) 320-2500 to learn more, or complete our magical online application to get started.