Whether you’re looking to top-up your inventory, fix some equipment, purchase new software, or cover any other relatively minor investment or expense, you may be thinking of applying for a small loan for your business.
However, before you move forward, we have some very important advice that could literally save you tens of thousands of dollars, plus a great deal of stress and wasted time: make sure that YOU are the one who determines your small loan amount – not your lender!
The Inside Story on Small Loans
While there are credible and ethical lending companies in the marketplace – and we would humbly include ourselves among this group – the fact is that, just like with any industry, there are some bad apples out there. And one of the unprofessional objectives of these bad apples is get business owners to borrow MORE than they need. Why? Because it increases their profits!
Now, at Mulligan Funding we don’t think there’s anything wrong with earning a reasonable profit – provided that it’s done honestly, fairly and transparently. And pushing business owners into borrowing more than they need is categorically wrong, because it adds unnecessary and unjustified risks and costs.
That’s why we advise our customers to analyze how much they need to borrow based on their average monthly cash flow, and their planned investing or spending needs. If this amount means that they need to borrow a relatively small loan (e.g. $10,000 instead of $100,000), then that’s exactly what they should do.
What’s more, after our customers receive their small loan, they are welcome to apply for an additional loan, either during or after their initial loan is paid back in full. If their application is approved, we’re happy to advance the additional funds ASAP.
What to Watch Out For
Essentially, we urge you to steer clear of any potential lender who is pushing you to borrow more than you believe is suitable or necessary. This is especially the case if a potential lender tries to “hide” the costs of a larger loan by glossing over the numbers. You should demand to see ALL of the costs of each loan scenario (e.g. $10,000, $50,000, $100,000, and so on), so that you can clearly evaluate them on your own or with your advisors.
With all of this being said, it may in fact be in your best interest to apply for a larger loan – either because there is some financial advantage (e.g. a lower interest rate), or because you can use the funds in a valuable, profitable manner. We’re pointing this out because you shouldn’t see it as a “red flag” if a potential lender asks you if you’re interested in looking at the numbers for a larger loan. That’s not being aggressive – it’s simply being helpful.
However, you should never feel pushed, intimidated or tricked into applying for a larger loan that you need. After all, it’s your business, and YOU are in control! A credible, ethical lender will never lose sight of this.
Contact Us Today
If you’re thinking of applying for a small loan, then we invite you to call Mulligan Funding at 855-326-3564 to discuss your financing options today!
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.