What to consider when evaluating a business loan offer

Just because a lending company reached out to you, doesn’t mean you should give in right away. There are a few considerations and evaluations you should make to be able to determine if you are faced with the right loaning option unique to your current financial situation. Through thorough evaluations, you may be able to avoid unnecessary actions that may hinder your business’s growth in the future.

What should you consider in accepting a business loan offer?

1. The company’s reputation

Sometimes the legitimacy of the company can be seen in the good feedback of its customers embedded in their social media presence. Here are some red flags that you should lookout for when applying for a small business loan from an unfamiliar company:

- The lender does not have a well-established social media presence.

- The lender doesn’t do a credit score check or business background checking.

- The company’s staff seems to be in a hurry and asks you to accept the offer right away.

2. Payment process and repayment terms

It is also important to note that you and your company have a clear agreement and understanding of how your payment process and repayment terms should work. Will you pay back your loan via weekly payments, monthly payments, or bi-monthly payments?

3. Customer Service

A good company offers good customer service as well. They believe that a business’s success is rooted in happy and satisfied customers. You should also consider reading reviews related to the customer service of the company so you get a glimpse of how they respond to issues and disputes.