While an SME has massive potential, it cannot access an established business’s resources. Therefore, a golden ticket for SMEs is an SME loan that helps with a little extra working capital to grow or expand operations, deal with an emergency, or address the natural ebbs and flows of the business.
While many business loans are available, comparing different lenders and parameters is important before deciding, as every business has specific needs. Let’s consider the top factors when comparing lenders,, so you pick the right one.
1. Application process
The first step to a loan is an application; you want a streamlined process from start to finish. It would help to look for lenders with an accessible, straightforward, informative, and customer-friendly approach. Also, don’t forget to check how long it takes to disburse loans, as that could affect your day-to-day operations.
2. Business loan charges
A business loan has several components: processing fees, interest rates, foreclosure charges, late fees, etc. Before you finalize a loan, you should understand the possible bills that they may levy. Read the fine print carefully to avoid missing out on hidden charges and paying the price later. Once the costs are transparent, you can make the right call.
3. Lender’s reputation
An SME loan is a big commitment. So, when you decide to borrow, you must pick a reputable lender. A background check is an easy way to start. You can look for ratings and reviews to help you make an informed decision. Ensure the positive reviews are consistent. You can even browse through their website and ensure information is available. Details like a phone number that’s easy to find, a visible ‘about us’ section, details like a business loan EMI calculator, and such data should be at your disposal.
4. Easy repayment
Depending on the lender, lending terms and payment schedules differ. You should understand lending terms and payment schedules upfront like the loan charges. You might want to look for a lender that offers a flexible payment schedule tailored to your business needs to avoid undue pressure on you.
5. Ongoing customer service
Along with a quick and easy loan process, your lender should also have an approachable and easily available customer service team. The team should be able to answer your queries or doubts clearly and effectively. Once your SME loan is processed, this team will handle any doubts and questions along the way.
Taking a business loan is a big decision. So, you need to look around for a suitable one that fits your needs. Stay conscious and cautious! When you’re ready to zero in on a lender, ensure you’ve covered all the bases.
