Snagging a Rate That Saves You Money | Access 2 Knowledge

Borrowing money comes with different terms and different business loan rates that affect how much the loan actually costs you upon repayment. Your own financial condition and assets will also determine what rates are available to you. If you have a poor credit history, odds are your rates will always be higher than someone who has an FICO score over 700 will. That’s why it pays to shop around and do your research ahead of time.

Get Your Documentation Together

If you want the best business loan rates, you have to be prepared to argue that your case that you are not a business risk. That means pulling your credit history ahead of time and fixing any discrepancies. Dispute any inconsistencies and try to address a bad history before a lender decides to take a peek at it first. This way, if you know what’s already on there, you can make notes for lenders on the file if something appears bad, but is being disputed as valid or has been settled and just needs to be cleared off your history.

Make sure your financial records are in order. As a business, you may be asked to show your numbers to prove the health of your business via financial statements. You may be asked to show them your bank accounts or proof of collateral. When you’re trying to get a good rate, you’ll have to show that you have a strong financial standing and good future prospects too.

Understand the Terms of the Loan

Based on your financial history, you’ll know whether you even have a shot at a great business rate or if a potential lender is going to view you as a credit risk. Either way, there are loans available for a variety of situations, but the rates and terms will differ. Typically, the longer the repayment period, the lower the monthly payment, but also the higher the total amounts you pay. Add to that a high interest rate and a long term, and you can easily end up paying twice what you owe by the end of the loan period. Be sure to understand how much the loan actually costs when you are done and whether you can handle the debt load so that you don’t default before you finally pay it off.

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Finance | April 20, 2010

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Snagging a Rate That Saves You Money

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