Few things fire the imagination more than the thought of being able to own your own business. The idea of being your own boss is a tantalizing one, as is the dream of economic prosperity and freedom, all of which can come from owning your own business. Securing a consistent stream of capital is essential for any business big and small. What’s more, being able to get a startup loan can be a huge boost, and just what you need for your small business to do something big. There are many different types of loans out there, and so you’ll want to be sure you’re getting the right small business loan for your needs.
1. The Size
First and foremost, you’ll want to consider just how big of a loan you want to get. While you never want to borrow more than you need, you also want to be sure that, if you’re going to go through the process of securing a loan, it can adequately cover your expenses or fuel your expansion as needed. When it comes to business loans, size matters – the size of the loan overall, that of the installments in which you’ll be paying it, and the interest rates. We’ll talk about that last part a bit later, but for now, it’s vital to note that those first two elements will vary depending on the nature of your loan. Unsecured loans, for example, will have different stipulations attached (or not attached) to them than more standardized plans. Take the time to review the different sizes of each of these factors with a loan officer or the agent in charge of your loan to be sure you’re getting the small business loans for your needs. You may be able to find more information online. Thinking Capital is a good place to start your research.
2. The Length
Next, you’ll want to pay close attention to the length of the loan in question. The bigger the loan, the bigger the risk – but then, the bigger the risk, the bigger the reward. You’ll, thus, want to pay close attention to how long you have to pay back your loan. Short-term loans can prove to be more costly up front, while long-term loans can, naturally, have a bigger cost overall, albeit with more time for you to grow your business and, thus, not feel the impact as much.
3. Interest Rates
This factor will derive in large part from the two above. Larger loans or loans which are intended to be paid back within a shorter time frame can often have higher interest rates. In addition, loans which have a longer time table attached to them have the potential to lead to more interest accruing over time.
4. Your Collateral
Last, but not least, you’ll want to make sure that any items that you put up for collateral as part of the loan aren’t anything which could ruin you financially should things go wrong. Here again, you’ll want to check with your lending agent or loan officer to see what’s required for collateral.
Take the time to review the ins and outs of any deal, read the fine print, and you’ll be well on your way to getting the loan that could help spark your small business towards something big.