Business Loans; What you should look out for

When you decide to apply for a business loan, the first thing you need to do before taking on new debt is to decide on the purpose of the loan, the amount you would like to borrow and how much you can afford to pay back over a period of time. You will also need to take into account any additional fees in relation to drawing down a loan.

When you have all of this information, it is time to start looking for your loan. You will need to look at all the loans available to ensure that you get the best deal for you and your business. You will find that there is a vast amount of choice available to you. This can leave it extremely confusing if you are not sure what type of loan is best suited to you. You can use internet comparison sites to look for a loan as they can compare loans and match them to your specific criteria.

Taking out a business loan is a big commitment. You will need to ensure that you are borrowing from a reputable lender. You can get a business loan from high street banks or online lenders. Make sure you do a background check on online lenders before considering taking your loan with them. You can typically find customer reviews online that should help inform your decision.

Applying for a loan can be a daunting process given the huge number of lenders offering finance at different rates. You need to ensure that you check the terms and conditions in detail to make sure you haven’t overlooked something. It is the responsibility of a loan provider to make sure the information you receive is clear and accessible. If you don’t understand something, ask.

There are different lending terms available from different lenders. Traditional loans are paid over a set period of time generally on a monthly basis. However, there are other options available that may be more tailored to suit your needs. If you are considering a fixed term loan, there are simple loan calculators online that you can use to find out how much your monthly repayments will be. All you will need is the amount of the loan, annual interest rate and length of time you wish to take the loan over.

Finally it is crucial to look out for hidden charges when deciding on your loan such as early repayment charges, late payment penalties or even processing fees. If you are not careful these can add to the cost of your loan repayments. All fees should be explained to you by your lender. If your lender does not explain all these fees to you, you can contact them and challenge the fees via the Consumer Rights Act. This legislation protects your rights and makes it easier to challenge hidden fees and charges. If this fails you can always seek redress with the Financial Ombudsman Service (FOS).

Kim Paskin

 

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