While you may be desperately in need of money to pump into your business, you don’t have to jump at every opportunity you encounter. Not all financing sources are the same, and that is why you may need to do some homework so that you don’t find yourself in the hands of financial debt you cannot recover from. The following factors must be considered when looking for a business financing source.
The lender’s requirements: Every lender has its own requirements which must be met before financing can be approved. You must check these necessities before applying for the money. Some lenders don’t fund start-ups, which means you must have an ongoing business to qualify for their financing.
Interest rate: The first thing you will want to know is the interest rate your lender charges. If it is too high, you may wish to continue shopping around.
Terms of payment: Does the lender give such things such as a grace period? How are you required to pay the loan; daily, weekly, or monthly? How long is the loan period? Looking at the terms of the loan, you should know if you will manage to pay for it or not, based on your income, of course.