Whether you are actively exploring ways of funding your business or just beginning to think about how to finance future growth, it's never too early to start learning about some of the most important factors to consider. With the number of financial tools and services expanding and non-bank innovators entering the market, small business owners have more choices than ever. But not all business loans and credit lines are created equally. Here are some important things to consider when comparing ways of financing your small business.
How long does it take to get approval for small business financing?
The time frame for receiving a decision about your application, and then getting access to your funds if you are approved, can vary dramatically. The time frame for most small business lenders can range from 60 to 90 days or up to six months. However, innovative new non-bank lenders are using data and technology to dramatically shorten the timeline for approval. This lets small businesses act with greater flexibility by giving them access to financing options at the speed of the market in which they compete. For example, Idea Financial lets you apply in minutes, provides a decision within hours, and if you are approved lets you access funds within a day.
Will the small business loan affect my personal credit?
It's very important to check to see if your small business financing or application for credit will affect your personal credit in any way. When you apply for business loans or credit from a bank, this can impact your personal credit and factor into your credit score. Applying for a credit card for your business can have a similar impact on your personal credit. Among online lenders, the effects on people's personal credit varies. With Idea Financial, your application for small business financing will not affect your personal credit or credit score.
Does the lender charge an annual fee or an origination fee?
When applying for a small business loan or line of credit, it's very important to consider all of the fees and expenses that might be involved. Lenders are not always transparent about these. Consider these expenses carefully. At first glance, a loan may seem low-interest but entail many hidden fees. For example, banks, credit cards, and many online lenders charge an annual fee or an origination fee to cover the cost of processing the loan. Idea Financial will never charge an annual fee or origination fee.
Does the lender charge a fee for repaying the loan early?
Some banks, credit cards, and lenders actually charge you a fee if you pay off your loan early. They may have anticipated earning more off your indebtedness to them, so they write early repayment fees into their loan agreements. At Idea Financial, we believe it is unfair to charge small businesses for being responsible and paying off their loans early. Our goal is to support your success. Idea Financial does not charge an early repayment fee.
Does the lender provide a dedicated small business advisor?
Some lenders provide little more than a loan. Idea Financial provides you with small business advisors who can give you feedback and insight on your business plans. We've worked with many small businesses and want to pass along the insights we've gained to our partners.