Compare Lenders to Get the Best Small Business Loans Rates
Posted on March 27, 2014 in Banking Issues
When it comes to finding the best deal, few methods are more effective than comparison shopping. If you want the best rate for your car insurance, then you will go out and find the rates from several different companies and then determine which one is best for your situation. Comparison shopping is second nature to people who want to make sure that they are getting the best deal possible. But the problem is that not enough business owners take their consumer habits and use them when they are trying to find deals for their businesses. Comparison shopping for small business loan rates is just as effective as comparison shopping for your personal car insurance rates.
Most business professionals do their best to separate their professional life from their personal life and that is a good idea in most instances. But, as a consumer, you develop certain instincts and habits that allow to save money which could be very useful when it comes to shopping for business loan rates. You should use those instincts to your advantage and take the time to find the best possible deal for your business. If you want to enhance your cash position and have the funding you need to move forward, then you need to find a loan rate that your business can afford. Comparison shopping is the best way to do it.
How To Find Lenders To Compare
Before you can compare loan rates and find the best one, you first have to devise a way to find the best lenders to compare. Your company's finances are serious business, so you will want to take your time and find reputable lenders who can get you the best possible deal. While it is nice to be able to find local lenders who can help your company grow, you should also consider the many reputable online lenders as well. There are business lenders based online who have been offering great deals to companies for years and you should take advantage of their deals.
You should have at least five lenders to compare and you should have some way of being able to speak directly to your lender. Online lenders have toll free phone numbers that offer a method of communication that is just as effective as a personal interview. Your commercial lenders can come from personal referrals from people you trust, or they can be highly rated lenders on various directory websites. You should also talk to the bank you do your personal banking with about your commercial needs as well. A pre-existing relationship can work strongly in your favor. Once you have your lenders chosen, make personal contact either through a phone call or by setting up a personal interview.
What Are You Looking For With Each Lender?
It is important to remember that you will be looking for a long-term relationship with the lender that you choose. Business professionals spend a great deal of time establishing strong relationships with lenders to keep those options open when the business needs funding. With each lender, you want to pay attention to their customer service practices and determine whether or not you enjoy doing business with each bank. Do not be afraid to ask to speak to a different loan associate if you do not feel comfortable with the first one you talk to. Always give a lender every chance possible to win your business, and that includes trying a new loan officer if necessary.
Talk to each lender about their small business loan rates and see what kind of history each lender has for establishing low rates. If you happen to contact a lender when they are having a rate promotion, then you could be misleading yourself into thinking that the low rate you are getting is the kind of rate you will always get from that lender. Discuss the application process and find out what kind of procedures the lender follows for approving loans after the initial application is filed. Some lenders require a new application for each loan, and others do not. You may find it easier to deal with a lender that does not require persistent applications to get funding.
Be Consistent When Comparing Rates
A business professional who is out comparing loan rates can often get caught up in the heat of the negotiation. You may start to discuss terms and loan conditions with a particular lender that are not the same as the conditions you have with other lenders. The problem is that if you get inconsistent with how you compare rates, then you are not getting an accurate picture as to what kinds of deals you are getting. Prior to heading out to talk to lenders, you need to make a list of the loan conditions you are looking for and then compare the rates you get based on those conditions. If you give each lender different conditions, then you are not comparison shopping properly.
Another rate comparison mistake that a lot of entrepreneurs make is talking to different associates at different times. It is important that you find a loan associate at each lender that you are comfortable with and then do business only with that associate. If you get different associates each time you talk to a lender, then you have to start the entire process over again. Even though there may be a file on you that a new associate could use to get you a rate, it does not replace the time you have put in discussing your situation with the original associate. Always find a lending officer you are comfortable with and stay with that officer throughout the process.
Get Everything In Writing
The worst thing a business professional can do is to have a loan associate say "that is part of the deal" and then not have that put in writing. This is not a matter of trust; it is a matter of business. If you want to avoid missing out on the loan rates and conditions that you worked so hard to have put in the agreement, then make sure it is all in writing before you sign the paperwork. Make notes as you negotiate the deal and then check the contract against your notes to make sure that everything you discussed is part of the final arrangement.
The same thing goes for hidden charges that the bank did not reveal when you were negotiating your rate. Never sign a loan contract until you understand all of the charges involved in your loan. Make sure that the rate you negotiated is the one you are getting and do not allow last minute changes by the bank to affect your final loan rate. No matter who you are getting your loan through, you always want to make sure that the final terms of the loan are in writing. You also want to make sure that you read any terms that were added as part of the deal, but were not part of the negotiations as well. Protect yourself at all times and you will get the best small business loan rates available.