5 questions to ask before applying for a loan for my company
Applying for a loan for my company is not a decision that should be taken lightly, so we bring the collection of 5 definitive questions to ask yourself before deciding to take financing
1. Will I qualify?
Lenders will base their qualification for a line of credit on your credit history, credit score, annual income, cash flow and your ability to provide collateral.
Commercial credit lines can be secured with commercial or personal assets, such as real estate or equipment, that act as collateral and that can be sold if the credit line is breached in payments.
Although today, thanks to technology there are solutions that allow you to access unsecured credits, because they analyze your behavior and history based on complex algorithms, such is the case of fintechs.
2. How much money can and how quickly can I get it?
Each line of credit has a predetermined limit, which is the maximum amount of money you can borrow. Make sure that what you are requesting fits your needs. Do not waste time requesting $ 200 thousand pesos where the maximum limit is $ 50 thousand. On the other hand, do not apply for a larger credit limit than you need, as you could borrow unnecessary money, which would increase your debt unnecessarily. The approval time also depends on the type of financial institution.
In the case of companies, Fintech grants you credits even in 48 hours if you have your documentation ready and complete, on the other hand, traditional banks have longer and more cumbersome processes.
3. Can I make monthly payments on time?
It is a simple but important question: once you have accepted a line of credit, can you pay it on time? Make sure the weekly or monthly payment is within your reach.
4. Can I use the funds for any purpose?
The short answer to this must be yes. Any commercial need, such as the purchase of inventory or renovations, are perfect examples of the use you can give to financed money, just define the objective of the loan from the beginning and use it responsibly.
5. Do I meet the necessary requirements to apply for the loan?
Some studies have shown that up to four out of five consolidation loans never close, not because the business does not qualify, but because of the lack of documents. When applying for a business loan, you will need certain documentation and requirements such as being discharged from the estate for at least six months.