Tips for getting your loan approved (FINAL)
Critical Things to Avoid While Seeking a Loan for Your Business
Unsure of loan amount you need
Over-borrowing can lead to wastage of the loan while under-borrowing can leave you exposed in case of serious cash emergency. By coming up with forecast cash flows for the business and laying down all the positive and negative outcomes that might come up you should know the best amount to borrow. The funds will then be enough to cover the entire investment, unpredicted scenarios and the needed working capital to completely execute the project.
Being sidetracked by the interest rate
Lots of borrowers fear the interest rate so much it distracts them from looking at other important factors. As you shop around for the best financing products, don’t just be hoodwinked by the interest rate.
Look into other factors such as the loan term offered, percentage of collateral or asset vis-à-vis the loan amount, repayment formula, default guarantees, whether personal assets have to be specified, among others. Don’t just look at the interest rate and miss the other important details.
Rapid loan repayment
Being debt free and avoiding the mistake of staining the credit score is high in the mind of every borrower. As such, it’s common to want to repay the loan really fast. However, rapid loan repayment could come at a cost to the business. If by re-investing the funds in your project can earn you more don’t hurry the repayments. Pay the expected monthly reimbursement and re-invest the extra into the project.