Choosing the right business loan
Published by MFAA
From time to time, a business needs a cash injection. With so many lenders offering a dizzying array of products, it can be difficult to know what to choose.
There are plenty of different types of business finance, but before diving in and applying, it’s important to understand your requirements first, so that a loan can be matched to your needs, and so that you can potentially avoid the problem in the future.
The consequences of choosing the wrong finance product include paying too much for finance, or ending up with a loan that simply isn’t fit for the purpose – in this case it may make a problem worse, rather than solving it.
Work out how long it will take to repay the amount you need to borrow, whether the repayments will impact the business.
You should also think about what has caused the shortfall and whether you need to take any other action. A lot of people in need of short-term debt might not be invoicing properly or collecting their debts properly so fixing this will also help the business into the future.
Finally, make sure you talk to someone experienced with specialist knowledge of small businesses, or a good understanding of your business and its needs.
Find an MFAA Accredited Finance Broker who specialises in business and commercial lending.