The Industry Handbook: Money Lending

Finances are a tricky thing to stay on top of, and there may be times when you need to look at reaching out for extra support. This could be through the use of a payday loan with bad credit or even a credit card. Whatever you choose, you’ll need to be aware of the terms and conditions, and the criteria required too. So, if you’re thinking of going through the money lending process, keep reading and read through our industry handbook. 

Check All Your Options

One of the most important things you can do is to check all the different options available to your business. There are business loans, business overdrafts, business credit cards, and even invoice and asset finance. You need to know the difference between them all and understand which one can work best for you. You might prefer to have all the cash you need in one lump sum like you would with a loan, or perhaps you want to control how much money you spend with the use of a credit card or overdraft. Knowing which type of finance is right for your lending journey will help you immensely and prevent you from increasing your debt too much. 

Interest Rates

You want to be very cautious when it comes to interest rates. Lots of lenders will advertise the best possible rate going, but when you apply, your details make it entirely different. You want to try and go for a low interest rate to stop you from paying back way more than you originally borrowed, so don’t be afraid to shop around between lenders before committing. There will be some lenders who offer you amazing interest rates and others that are on the higher end of the scale. So, it always pays off to check what interest rates are available instead of applying for the first loan you see. 

Obtain Quotes Beforehand

Getting a quote can be an essential step towards making your application, and you really don’t want to miss out on it. Generally, lenders will advertise a one of their better quotes that most likely won’t be accurate to you. So, you want to get a personalised quote beforehand, and you’ll be able to see exactly how much you’ll be paying back and what your interest rates will look like. Your quote will take all of your financial information and be relevant to your affordability, making it much more accurate. 

Be Prepared For Asset Collateral 

As a business, you may need to be prepared to undertake some form of collateral, and the most popular kind is via your assets. This means that if you don’t have a great credit score or perhaps you don’t yet have a huge amount of business capital, you can still borrow money and access the support you need. Your assets will only be taken if you’re unable to repay the agreed amounts, so as long as you keep up with your bills, you should be fine. Sometimes, lenders will allow you to use personal assets for collateral, but most of the time they have to have been purchased for business use. 

Always Be Honest

It’s crucial that when you’re applying for any type of business lending, that you always be 100% honest when applying. The application process isn’t going to be simple, so you need to ensure that you read through everything carefully. It’s useful to have all your business banking information to hand when completing an application, as you’ll find it easier to refer to them when necessary. The questions aren’t designed to trip you up at all either. Their purpose is to allow you to be open about your current situation and help the lender to accurately provide you with a quote or a well thought out rejection. So, always take your time with your applications forms, and you’ll find that you have a much better success rate. 

Check Your Credit Score and Eligibility 

Another facet of lending is your credit score and eligibility. Credit scores are worked out using all sorts of different information about your business. From your profitability to the size of your business, everything will be taken into consideration. Your business credit score can be impacted by things like not paying your bills on time, and it can really lower your chances of being approved for finance. It’s a good idea to check your credit report on a regular basis so that you know exactly where it is at all times. You don’t want to apply for a loan and find out that your credit score is damaging your application. You also need to ensure that you read through the criteria to see if you’re actually eligible for the loan in the first place. For instance, it could be designed for business that are just starting out, and if you’ve been trading for 5 years, you might meet that requirement. 

The lending process can be quite difficult to navigate at first, but this handbook should hopefully allow you to go through it a lot easier. Making sure you check things like your credit report, the interest rates, and the criteria will help you to choose the right product for your business. So, if you’re thinking of borrowing money from a lender, make sure you take these tips on board and you should be able to secure the support you need.