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How to Choose the Right Lender for Your Small Business

Securing the right financing is a critical step for small business owners looking to fuel growth, cover operational costs, or embark on new ventures. However, choosing the right financing institution can be a daunting task. It’s not just about obtaining funds; it’s about finding a lender that aligns with your business goals, meets your expectations, and provides funding on terms that are conducive to your success. Here are the key factors that small business owners should consider when selecting a financing institution.

Considerations when choosing the right lender:

  • Assess your needs
  • Consider your business specialty
  • Evaluate costs & interest
  • Look at repayments and flexibility
  • Ask about application and approval speed
  • Consider collateral requirements
  • Look beyond funding
  • Read customer reviews

Assess Your Funding Needs

Before you start evaluating financing institutions, it’s essential to have a clear understanding of your funding requirements. Determine the exact amount of funds you need, the purpose of the funding (e.g., expansion, inventory, working capital), and the timeline within which you need the funds. This initial assessment will help you filter out lenders that cannot meet your specific needs.

Consider Your Business Specialty

Different financing institutions cater to different types of businesses. Consider factors such as your business’s size, industry, creditworthiness, and years in operation. Some lenders specialize in working with startups, while others may focus on established businesses. Matching your business profile to a lender’s expertise can streamline the application process and increase your chances of approval.

Evaluate Costs and Interest Rates

The cost of financing is a crucial factor to consider. Different lenders offer varying interest rates, fees, and repayment terms. Carefully review the Annual Percentage Rate (APR) to understand the true cost of borrowing. Compare offers from multiple lenders to ensure you’re getting the most competitive terms. Keep in mind that while a lower interest rate is desirable, other fees and charges can impact the overall cost of the loan.

Assess Loan Term and Repayment Flexibility

Consider the loan term that aligns with your business needs. Short-term loans are ideal for immediate funding needs, while long-term loans can provide more flexibility for larger investments. Additionally, evaluate the lender’s repayment options. Can you make early repayments without penalties? Are there flexible repayment schedules that match your business’s cash flow?

Review Application and Approval Process

A lengthy and complex application process can delay funding and hinder your business operations. Research how streamlined and efficient the lender’s application and approval process is. Look for lenders that offer online applications and quick response times. Read reviews or seek recommendations from other business owners to gauge the lender’s reputation for responsiveness and transparency.

Consider Collateral and Security Requirements

Some lenders may require collateral or personal guarantees to secure the loan. Assess the lender’s collateral requirements and evaluate whether you’re comfortable offering assets as security. Unsecured loans, although typically harder to qualify for, may be an option for businesses that don’t want to put up collateral.

Explore Additional Services and Support

Beyond funding, some financing institutions offer value-added services such as financial advice, business mentoring, or networking opportunities. These additional resources can provide significant support to your business’s growth and success. Research whether the lender provides any such services that align with your needs.

Read Customer Reviews and Testimonials

The experiences of other small business owners can offer valuable insights into a lender’s reliability and customer service. Look for online reviews, testimonials, and case studies to understand how the lender has worked with businesses similar to yours. Check out the Better Business Bureau to see if any complaints have been made against a potential lender. Try to understand the full picture of an experience if a lender has responded to a review. This can often give you an idea of the tone and professionalism your business can expect as a client.

Choosing the Right Lender

Choosing the right financing institution is a decision that can significantly impact your small business’s growth and financial health. By carefully assessing your funding needs, considering your business specialty, evaluating costs and interest rates, reviewing the application and approval process, and exploring additional services, you can make an informed choice that aligns with your business goals. Remember, the right financing partner should not only provide funds but also contribute to your business’s success through transparent terms, responsive support, and a commitment to your long-term growth.

Eagle Business Credit is a small business funding company that specializes in speed, flexibility, and transparency. Our funding services are aimed at growing businesses that need more cash on hand to fill more orders. Funding is based on a company’s invoicing—so, the invoice amounts are the basis for the amount of funding available.

Choosing a Lender for Growth

Small business owners can build their business credit with working capital funding that allows them to pay suppliers early or on time. Eagle’s funding services open opportunities for business growth without requiring a high credit score or lengthy time in business. Qualifying with Eagle is often easier than qualifying for a bank loan because the requirements are different. Many small businesses use Eagle’s funding services in order to qualify for bank loans or lines of credit.

Choosing a Lender for Speed

The financing application for Eagle’s funding services does not require as much paperwork as a bank application, and it can be filled out online. We strive to be fast and efficient in the application process, so we can provide approval decisions in as quickly as 24 hours. We offer same day funding, so your business can get the money it needs to grow. Online lenders are also known for speed, but take a look at the cost of that speed. We don’t add any hidden fees in order for your business to be funded quickly.

Choosing a Specialty Lender

We can fund all small businesses that sell to other businesses on credit terms. We can fund businesses of all shapes and sizes. We specialize in funding staffing, transportation, janitorial, and manufacturing. A lender that specializes in your business industry will be able to meet your funding needs more directly and completely. It is worth shopping around until you find a lender that understands your industry pain points.

Choosing a Lender with Customer Support

The right lender for your business will have positive customer reviews and exceptional customer service. Finances are a prickly area when it comes to service. You don’t want bad service or hidden agendas when it comes to your money. You’ll want a lender that you can talk to when you want to negotiate your price or amount. Choose a financing partner that you can get on the phone and that knows your business. Be wary of lenders offering a low price if their customer reviews say the opposite. This can mean hidden fees and lack of transparency in their communications.

Choosing Eagle Business Credit as the Right Lender

Eagle Business Credit is a funding machine staffed by industry professionals ready and willing to help grow your business. The team at Eagle focuses on transparency and exceptional customer service. Our goal aligns with our clients—their growth. This is because our business grows when our clients grow.