How to choose the best small business loan

Borrowing more money than you need can overburden your business while not borrowing enough can make the outcome of the project fail.

• Get a few estimates.
• Compare them.
• Get a better understanding of how much it will actually take to get the job done.

Making an educated decision will help avoid placing an unnecessary burden on your business and its cash flow.

Knowing your personal and business credit scores will help you understand what you can qualify for.

If you have less than perfect credit use the guide How to raise your personal credit score.

Business credit score and why its important guide has everything you need to know about establishing and rasing your business credit score.

Remember the higher the score the better the rates and repayment terms will be as lenders will be using those scores to determine how likely you are to repay the loan.

For instance the a minimum score of 640 is generally required by the Small Business Administration (SBA) to be approved for a long-term loan.

The Small Business Administration guarantees a large portion of the loans issued by private lenders.

This SBA Guarantee minimizes the risk for lenders enabling them to offer high loan amounts with longer repayment terms.

Business owners should stay on top of their credit to qualify for low cost business financing options such as SBA Loans.

While it is always best to maintain good credit standing multiple funding options exist to help business owners without one to help secure the capital they need.

Actually, taking on a loan and making timely payments can significantly improve your credit standing and lower the cost of borrowed capital in the future.

Before applying for funding take a close look at your expenses.
Are there certain expenses and fees your business can do without?

Cutting out unnecessary spending and reducing the amount of your monthly payments will increase your margins and improve your businesses cash flow.

Higher margins lead to higher net income and a much healthier balance sheet.

Stronger business financials equal lower rates and better repayment terms of your small business loan.

Is that monthly magazine subscription that you haven’t read in the last 3 months really necessary? Do you pay various online subscription services that you barely use if at all?

If you are like most of us who like to try new services in hopes of improving their business, chances are there are probably a plethora of recurring monthly fees on your bank account you can do without.

Go ahead. Check.

The results might surprise you.

There are many different types of business loans.

It is important to know the differences when choosing the best small business loans your business.

After knowing what you will be using the funding for, choose the business loan best suited for your objective.

Why go into a 15 year long-term loan when you are only buying inventory for the next month.

There are much more suitable financing options for that purpose.

Would you prefer a daily or weekly payments versus having traditional monthly payments.

Knowing the various types of business loans will help you make the right decision.

Knowing the requirements for the best suited business loan to meet your objective will increase your chances of approval.

• Is your credit score high enough?
• Are you willing to put up real estate as collateral?
• How long have you been in business?
• Do you have all the necessary documents?

Requirements vary greatly depending on each individual loan type.

You can learn about all the requirements for each loan type in our Small Business Loans page which describes them in great detail.

Deciding between an online lender vs a traditional bank or a credit union is a decision that you need to make depending on what your current objective is.

With traditional banks borrowing money can be time consuming, usually requiring a ton of paperwork, a business plan and a lengthy loan application process.

Online lenders or alternative lenders will usually require minimal paperwork and in most cases you can receive funding in under 48 hours.

Interest rates tend to be lower with a traditional bank, but take into consideration most bank loans require collateral while online lenders do not.

Qualifying for a traditional bank loan in the current financial climate can be a lot more difficult as opposed to dealing with online lenders.

Lenders offer more funding options for business owners with less than perfect credit.

Cash advances, invoice factoring, unsecured business loans are just some of the options available to borrowers without good credit history.

Orumfy works with multiple national funding lenders that can meet your specific needs for obtaining business funding with a low origination fee, better rates and repayment terms.

The time for procrastinating is over.

With the modern technology at your fingertips, you don’t have to wait.

Let Orumfy show you what you pre-qualify for in seconds and get the capital you need today.

Having a good ongoing relationship with your lender can be tremendously advantageous to business owners of both small and medium-sized businesses.

Having your lender know about your past business financial history can help them choose which of the best small business loans works with your business plan.

Working with the same lender gives you an advantage as the lender will have a better understanding of your business history and how your business model works.

The underwriting process for repeat customers is a lot faster and requires a lot less paperwork, so lenders often lower or waive the loan origination fee.

The loan application process will take minutes, since all you have to do is provide updated bank statements and/or A/R report which your lender might already have access to.

Orumfy carefully selects the lenders we work with and monitors the entire life cycle of the relationship between our clients and our partnering lenders.

Our “Human-Touch” approach ensures every single client receives the attention he/she deserves while establishing a long lasting relationship with a lender.

Click here to use the resources Orumfy has made available to you, to help make the right decision when choosing the best small business loans.

Use our Loan Affordability Calculator and see how much funding your business can afford to take on without overburdening the businesses cash flow.

Knowledge is power.
Take your time to make the right decision.

Before signing make sure to carefully read the funding agreement.

If there is something you don’t understand - ask.

• Are the terms and rates on the contract the same that were discussed with you?
• What is the origination fee?
• Are there any hidden fees?
• Is there a prepayment penalty?

Make sure you are fully aware of all the terms before signing on the dotted line.