We always hear it – “cash is king,” and the saying rings especially true for entrepreneurs and Canadian small business owners. Whether for cash flow, loan consolidation, opportunity or crisis, an online small business loan may be a great option for companies and entrepreneurs. But before you start filling out applications there are some key questions and considerations to examine.
- What could I do with a small business loan?
It may seem a bit obvious, but it’s essential that you clearly identify your loan purpose, with consideration not only to the immediate problems a loan can solve, but also of the opportunities that additional working capital can offer.
Some common reasons to get a small business loan include cash flow, loans for equipment replacement or debt consolidation loans. But loans can also provide small businesses with working capital to invest back into new talent, innovation, expansion and growth.
- Would this small business loan help grow my business?
Consider your business long-term plans; How do you see your business evolving in the next few months? What about the next few years? A loan at the very least much help to sustain your business, but consider how you might invest in growth and see a measurable return on your investment. Be sure to consider fees and interest payments in your evaluations.
- Can I afford to repay the small business loan?
A tough but crucial consideration is whether you will be able to repay your small business loan according to your repayment terms and plan. Repaying your loan on schedule requires good, sound financial planning. Before taking out a small business loan, conduct financial analysis such as cash flow analysis and revenue projections to determine whether the business is able to make enough to repay the small business loan. Not all lenders offer the same, flexible terms and rates - be sure to consider online lenders like Lendified, and avoid predatory “payday” loans at all costs.
- How quickly do I need the funds?
Traditional banks can take up to weeks for your small business loan to process, and even so, your application may be denied. Thanks to the power of fintech and data, getting a small business loan is easier than ever today. If time is of the essence, you’ll want to look into an online small business loan from a Canadian lender like Lendified. Your online loan could be approved and available to you within 24 hours.
- How much working capital do I really need?
Without a concrete plan, you might not know exactly how much you need to borrow to grow your small business. You may end up underestimating or overestimating the amount you need and need to make strategic changes to your business. If you are estimating or don’t have a handle on the numbers, seek out financial advice from an accountant or bookkeeper.
- What kind of lender do you want to do business with?
These days it’s easier than ever to access a small business loan – the big question is who is credible and who you can trust? As it is difficult for small businesses to secure capital from traditional banks, alternative lenders emerge as a much better option. However, we caution you to look out for red flags that may indicate fraudulent or predatory lenders. Before applying, we suggest you do research and seek out the credentials, backgrounds, customer testimonials and verified reviews of legitimate small business lenders. Review websites like TrustPilot can really help take the mystery of who you’re doing business with.