Common Mistakes to Avoid When Looking for Financing

Do you need business funding but aren’t quite sure which option is best?

With countless financing options available, there is much to consider before you apply for the best solution.

Unfortunately, many small business owners make serious mistakes when sorting out financing.

Avoid the following mistakes to ensure you get the best funding option for your business.

 

Paying Unnecessary Fees

Business loans often come with so-called hidden fees. These can include contract, administrative, origination, and application fees. Some banks deduct their fees from the total loan amount you’re given. Be sure to read the fine print and ask questions about any fees you see listed in your contract.

Failing to Prepare a Business Plan Beforehand

Whether you’re trying to expand your business or if you’re trying to get it off the ground, how much business capital you secure could depend on your business plan.

Lenders want clarity about your product or services. Mapping out in clear language what your goals are through a business plan helps you secure the funds you need. Keep in mind, your lender wants to know where their funds are going and for what purpose. Make it clear and you can expect a better result.

Failing to Check Your Credit Score

If you’re attempting to secure a traditional loan, your credit score will play a major factor in determining the outcome. Loan approval, rates, repayment terms, and associated fees are affected by your credit score. Before you head in to secure business funding, don’t make the mistake of not knowing what your credit score is. Come prepared to get the best financing options for your situation.

Missing Out On Alternative Financing Options

For other businesses, credit scores and business plans aren’t the problem, missing out on alternative financing is. There are several options available that you might not be aware of. These include:

Merchant Cash Advance

A merchant cash advance is an unsecured alternative financing option. That payment is provided with an agreement for a percentage of your future receivables paid back by either a daily or weekly ACH or future credit card or debit card sales. This simple financing option gives you access to funding in as little as 24 hours.

Unsecured Lines of Credit

Instead of offering up collateral to secure business funding, an alternative is to use an unsecured business line of credit. If you have good business credit, more overall revenue, and extensive business experience, you could qualify.

When you need business funding, consider Legend Advance Funding. We offer reliable and secure financing options regardless of your business needs. Give us a call today to learn more.