What can happen to you if you work with the wrong loan provider company?
Just ask this restaurant owner:
A restaurant owner had a pre-existing business loan with a major lender.
He’d always managed the loan well but did make a few late payments over the term.
Overall, however, he did the right thing. But that didn’t matter when it came time to renew the loan. His lender refused point blank, despite his stellar record. Worse yet, they exercised a payback clause that immediately put the restaurant in trouble.
It was only after securing an emergency loan from another lender that the business owner got out of trouble.
That’s just one of many examples of business owners discovering that their loans aren’t all they appear to be.
You need to find a short-term loan company that has your best interests in mind. These are the six tips that will help you do it.
This is a particularly important tip when you’re working with a non-major loan provider company.
Proof of success can come in a variety of forms. Testimonials on the lender’s website, coupled with further social proof from review sites, is a good start. If other people have good things to say about the lender, it’s likely that they provide a good service.
And if you can have a conversation or two with previous clients, you can reinforce those notions.
It’s also a good idea to look for positive mentions and features in major publications. In Unsecured Finance New Zealand’s case, we’ve had features published in Koshie’s Business Builders, Yahoo Finance, and more.
Credibility is the key here. Such publications won’t create positive features about a short-term loan company that doesn’t provide a good service.
Simply put, you’re looking to gather as much proof as you can that the lender is legitimate.
This is the issue that tripped up the restaurant owner in our story.
Even major lenders can insert clauses into their contracts that could damage your business if activated. A clause for immediate repayment could leave you owing thousands of dollars with no ability to repay.
This could lead to the failure of the business and even personal bankruptcy.
Always check the small print of any loan that you consider. As importantly, quiz the lender about any issues that cause concern. Any that aren’t completely transparent with their answers may be trying to hide something from you.
Ideally, your short-term loan company will have experience working in your industry. They should have a track record of providing loans to people in similar circumstances to yourself.
This shows that they understand the specific issues that you face.
Ask the lender if they can provide examples of how they’ve worked with similar companies to yours. Quiz them about your industry and what they know about the challenges you face.
Now, not all lenders will have worked in your industry before. That’s okay and it’s not grounds for automatic dismissal of the lender. If they’re willing to listen to your situation and provide advice based on the information you provide, they’re likely a good lender.
Ease of application is one of the key selling points for any short-term loan company.
The longer the application period takes, the more danger you may place your business in. If you need a loan to resolve urgent cashflow issues, having to wait several weeks for a response won’t work for you.
Ideally, your lender will offer a simple application form that you can fill out on a website. They’ll also commit to providing you with a response within 24 hours.
Plus, they’ll communicate with you about any documentation issues and walk you through any concerns.
The key is that they make the process as easy as possible to prevent any delays that could damage your business.
You want as much control over your repayment schedule as possible.
This starts with the loan term. Avoid any loan provider company that tries to force you into a term that doesn’t suit your business. The pressure of an overly short term and the possibility of missed payments that it creates isn’t worth dealing with.
You should have options when it comes to your term length.
Furthermore, be wary of lenders that charge you for making early repayments. Ideally, your lender will allow you to make extra payments when you’re able and won’t charge a huge fee if you clear the loan early.
Some lenders may try to push loan features onto your business that you don’t really need.
The problem here is that such features often come at a cost. If you’re not paying a direct fee to include them in the package, you may have to pay a higher interest rate.
This is where understanding what you need from your short-term loan becomes extremely important. It allows you to confidently refuse features that don’t serve your purposes. This means you’re at lower risk of missing payments or facing fees that you don’t need.
Be wary of any lender that keeps pushing a feature when you’ve established that you don’t need it. They may be more interested in making money from you than in working to your best interests.
By following these tips, you’ll find the best quick loan company for your needs. It’s all about establishing transparency and trust as early as possible in the relationship.
Unsecured Finance New Zealand aims to be a short-term lender that you can trust. We offer flexible business loans of up to $300,000 as well as a simple application process.
Are you ready to get started?
Apply online today to receive a reply in 24 hours or less.