If you’re thinking about taking out a small business loan to fund your current endeavors, the next step is to find a business loan lending partner that you want to work with. With so many loan lenders on the market, it may feel overwhelming to look at every single factor and consider every single lender.
To help you, here are seven key considerations that may help you choose a provider of funding that meets your needs. This will help to expedite your decision-making process so you don’t spend weeks agonizing over where to get your loan capital. Save time, and get the process started. Here’s where you need to start:
1. Why Do I Need Funding?
The first consideration is the simplest one: identify your primary reason for why you need funding. Some common ones include:
- You want to open a new location
- You want to grow your business
- You want to acquire a competitor business
- You need a cash flow bridge for this quarter
- You need to replace equipment
- You want to launch a new marketing campaign
These are just a few reasons why you could need funding… the possibilities are endless, and this list isn’t exhaustive. What’s important is that you identify why you need funding so you can narrow down your needs, and find a lender who’s able to meet those needs for you.
2. How Much Funding Do I Need?
The next consideration is how much funding you actually need. Chances are that you may not need to borrow as much as you think. Many business owners first turn to large, traditional banks to seek out business funding, because they believe that they need a high-dollar loan. However, it’s likely that a smaller amount might accomplish your goals just fine.
When considering a business loan, it’s important to consider your means to repay, as well as the financial burden of the debt. It’s true that business debt creates wealth, but it’s a tool that should be used responsibly. When searching for a lender, you should partner with one that only wants to approve you for what you can reasonably utilize.
3. What Type of Funding Do I Need?
A working capital loan is a lump-sum loan with flexible requirements that you can use for a variety of business needs and is ideal when you have a specific idea of how much financing you need for a specific project.
Business lines of credit, on the other hand, are approved for a set upper limit: let’s say $100,000. If you access $20,000 of that $100,000 to pay off an inventory purchase, you only pay fees on that $20,000, and the remaining $80,000 is still part of your available line if you would need to access it in the meantime. This type of loan is ideal when you know you’ll need to access capital, but the amount or circumstances could fluctuate.
4. What Kind of Lender Do I Need?
If you know that you need a loan, you’re probably wondering whether a traditional bank or a private business lender is the way to go.
Large, traditional banks tend to offer higher capital amounts, but the trade-off is often a rigorous vetting process with a long application and lots of supporting documentation needed. This process may involve multiple documents, including business plans, personal and business credit scores, at least two years of financial statements, tax returns, and even a comprehensive and updated resume add to longer approval times and a higher expectation of high credit score and long-established financials.
Private lending partners such as Mulligan Funding understand that businesses aren’t always on a straight path. A private lending partner generally offers more flexibility in terms of approval requirements, so if your personal or business credit isn’t perfect, it’s not necessarily a problem.
5. What is The Lending Partner’s Philosophy?
You need a business loan funding provider that you can trust, so look out for their philosophy and see if their values align with yours. Look for a lending partner who treats their client relationships like a partnership, rather than a number.
Your funding partner should look out for your best interest when proposing potential solutions, rather than burdening you with debt that you can’t use to your business’ benefit. Partner with a lending partner you can trust, like Mulligan Funding, and you won’t have to worry.
6. What if I Need Business Funding Fast?
It’s common to wait weeks or months to complete the business funding process if you go through a large, traditional bank. Time for approval, review of any amendments or supplemental documentation, and a disbursal may mean waiting weeks, or sometimes months before you finally see the funding that you need. When you’re already behind on accounts payable, or you have a time-sensitive opportunity to take advantage of, you can’t wait months.
If you need urgent business funding, don’t spend your valuable time on banks that will give you the runaround. Instead, contact a business financing expert at an alternative lending institution, such as Mulligan Funding. The timelines for a business loan through Mulligan Funding are extremely quick because we value your time. We can get approval within hours and funding the business day after approval*.
7. Can you See Your Lending Partner as a Business Partner?
It’s important that you work with your lending partner as just that: a partner for your business. You want to build a relationship with them, and for them to get to know your business so they can guide you on your funding needs as you grow and your needs change. You need a funding provider that understands the intricacies of YOUR specific business and who can help you in both the short and long term.
The information shared is intended to be used for informational purposes only and you should independently research and verify.
Note: Prior to January 23, 2020, Mulligan Funding operated solely as a direct lender, originating all of its own loans and Merchant Cash Advance contracts. From that date onwards, the majority of funding offered by Mulligan Funding will be by Loans originated by FinWise Bank, a Utah-chartered Bank, pursuant to a Loan Program conducted jointly by Mulligan Funding and FinWise Bank.