You have decided to start a business, or grow an existing business, and now need a commercial loan. Be prepared to research commercial loan rates and start sifting through all the possibilities for commercial loan lenders. Here are some things you need to know.
Lenders Want to Make a Loan
They really do. Making loans is how they make money. They want to make a deal, and you have to make them want to make a deal with you. This can be difficult however, because they want to have their cake and eat it, too. They want to make a deal with as little risk as possible.
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Lenders Want to Mitigate Risk
No one really likes risk, but often time the riskiest plans come with the biggest payoff. It is a fine balance and lenders risk their livelihood trying to find that balance. They need to make loans, but if the loan doesn’t pay they have less than they had before. No loan is better than a bad loan, but neither are good. They need to make loans, and they need to be good loans. Simple, obvious, but a good thing to keep in mind.
Make them Know You Are a Good Loan Prospect
Bring to light all the reasons you are a low risk. Do you have stellar credit, awesome collateral, or a virtually fail safe idea? Convince them. Do whatever you can to show risk mitigation on your end. If you do not have much to bargain with, there is still hope, but be prepared to pay some hefty commercial loan interest rates in the name of high risk.
This article was originally published by Biz2Credit
Published: January 19, 2015