While an SME has massive potential, it does not have access to the resources that an established business may have. 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 there are many business loans available, it is important to compare different lenders and parameters before making a decision as every business has specific needs. Let’s look at the top factors to consider when you compare lenders, so you pick the right one.
1. Application process
The first step to a loan is an application, and you want a process that’s streamlined from start to finish. You should look for lenders with an accessible, straightforward, informative, and customer-friendly process. Also, don’t forget to check how long it takes for loans to be disbursed, as that could affect your day-to-day operations.
2. Business loan charges
A business loan has several components to it such as processing fee, interest rates, foreclosure charges, late fee, etc. Before you finalize on a loan, it’s best you understand the possible charges and fees that they may levy. Read the fine print carefully so you don’t miss out on hidden charges and pay 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 do 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 that will help make an informed decision. Ensure the positive reviews are consistent. Additionally, you can even browse through their website and make sure information is clearly available. Details such as a phone number that’s easy to find, a visible ‘about us’ section, details like 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. Just like the loan charges, it’s best you understand lending terms and payment schedules upfront. You might want to look for a lender that offers a flexible payment schedule tailored to your business’ needs, so that there is no undue pressure on you.
5. Ongoing customer service
Along with a quick and easy loan process, the lender you pick 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 is the team that will handle any doubts and queries along your way.
Taking a business loan is a big decision. So, you need to ensure that you look around for a suitable one that fits your needs. When you’re ready to zero in on a lender, make sure you’ve covered all the bases. Stay conscious and cautious!