Questions you should ask your small business loan broker
Taking the small business loans can be a tricky affair and also understand the inches thick loan documents is not also possible always. So before applying for any loan, you must ask a few questions to your loan broker in order to know about the loan in a better way.
It is imperative to mention that the small business owners can leverage from taking loans from the loan brokers. Funding is one of the most predominant problems that are generally faced by the small businesses and thus they are always looking for different sources to arrange for the capital, so taking a 12 month loans can be the best bet for them. When most of the business owners think that they don’t need to take the help of a specialised small business loan broker, the reality is only with the help of a good loan broker you can choose the best-suited loan for your use. But you also have to remember that not all the loan brokers cater the same kind of quality consultation service toothier clients. So before choosing a loan broker, you must ask him a few questions that can help you to know about the loan easily.
Questions to ask a loan broker
In order to know about your loan better, you always should ask your broker a few questions so that there will be no doubt in your mind and you can apply for the same with more confidence.
1. Should I apply to the banks and credit unions?
First, you should ask your broker that to take an open whether you should go to the banks and credit unions or you should visit the private financers. To get the right answer to your query you must first decide what you want to form your loan? If you are looking for a low-interest rate then you must visit the banks and not the private players and on the other hand, if you need the loan faster like within 48 hours time then you must go for the 12-month loans without guarantor as there will be no delaying in processing the loan. Moreover when you want more amounts a moderate Monthly instalment for your loan then you must go for longer-term loans rather than short terms.
2. What will be the total cost of the loan?
In order to curb your cost of taking the loan, you must consider two things first, the interest rate and the annual percentage rate or APR. When you have higher interest rate on the loan then your cost of borrowing will be more and vice versa. So ask your broker about these factors beforehand.
3. Is there any additional cost that I have to pay?
Also asking the broker clearly about any additional costs is also important so that at the time of taking the loan you don’t have to spend more money from your pocket. If there is any commission for the broker then ask him about the same too.
4. Howe many lenders are available for you?
After stating all your requirements and your preference you should ask the loan broker that how many lenders will be available as it can brighten your chances to secure the loan easily.
5. What are the ramifications of the small business loan?
Don’t also forget to ask your loan broker that whether there are any negative ramifications of the loan too that can affect your business’s financial health greatly in future. Like what will happen if you want to foreclose the loan before the repayment period ended or if my credit score will be decreased then how it will affect my APR and so on.
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ABOUT THE AUTHOR
Emma Adams is a loan expert working for 786 Loans, one of the broking companies based in the UK. My interest in the Emergent FinTech business inspired me to become a loan adviser. Further details on- 786 Loans