Mistakes that can hurt your business loan interest rate
Making mistakes when you’re looking to secure a loan can prove costly. In fact, you could find yourself a couple of thousand pounds short if you’re not careful. So it’s massively important that you avoid our list of common mistakes that could raise your business loan interest rate.
Not tending to personal credit
Some people might not realise that student loans or car repayments can affect your business loan interest rate. In fact, many lenders will require you to send them your personal credit report before they’ll even consider providing your with the finance you need.
We advise that you consider your business prospects with each financial decision you make. For example, if you’re offered a 10% APR by a clothing store if you apply for their new credit card think, is this going to cost me extra when it comes to your business loan interest rate?
Picking the wrong type of loan
Picking the wrong financial solution could badly damage your business loan’s interest rate. Make sure you consider all your options thoroughly. For example, what if you chose a merchant cash advance to buy a new piece of equipment because they’re faster and more flexible than an equipment loan?
Well, if the equipment wasn’t vital, you could end up paying much higher costs as a result. We recommend using our online form so you can compare a myriad of options.
A short-sighted business plan
If you want someone to invest money into your company, they lenders need to be certain that they’re backing a winning horse. If you propose an illogical business plan you could be set for a higher increase in your interest rates, and some lenders might even deny you funding. However, well thought out business plans could do the opposite, providing you with lower interest rates.
So, it’s clear that you need to explore a variety of different loans to find the right one for your and your business. Loan Bird offer a wide selection of financial solutions from bad credit loans to guarantor loans. Just use our online form to see which works best for your situation.