Whether you are looking to expand operations or navigate through a business challenge you will probably be in need of some financial support. Taking an unsecured business loan is a great way to get the funds you need to realise your business goals.
Most people will look at the interest rate and take the lowest option. This can seem to make sense as a lower interest rate would suggest a lower overall repayment. Unfortunately, this is not always the case. There can often be hidden costs that make the loan substantially more expensive than one with a higher rate of interest.
How do you know what's best then??!! What do we Look into??!!
The Real Cost of Your Business Loan
Transparency, transparency and transparency are the three factors that will determine how much you really pay for your business loan if the circumstances change, additional fees written into the small print mean that the lender might be able to increase the cost of the loan.
Please read the tiny details of the loan terms to ensure there are no hidden charges or conditions you need to adhere to. Some great examples that are usually overlooked are upfront fees, discharge, early exit, and even a monthly or annual charge.
One Size Fits All?
A loan gives you the money you need for your business and sets the terms of repayment. But, not all loans are the same! A good lender recognises that every business is different. It will create an array of options that can even be tailored further to suit your needs.
Of course, the lender wants their money back. But, an excellent online lender will realise that tailored options make it easier for your business to meet its commitments and repay the loan. In short, the “one size fits all” is unlikely to be the type of lender that's right for you.
Are They Credible?
Many businesses are offering to lend businesses money but not all of these have your best interests at heart. You need to check the reputation and authenticity of the lender before you commit to anything.
This means checking they have a genuine physical address, contact details that actually work, they are properly registered, and that you can see all the details of their leaders.
Alongside this, the business should be able to offer testimonials that you can verify are real. After you have verified all these details you should also check on social media and online forums. This will help to show they are genuine.
More importantly, these sites can help you to assess the lender's customer service. You should expect a few negative remarks but the majority should be positive.
Can They Back Up Their Promise?
A company has dedicated marketing to show how good their services are. They can also feature testimonials that make them look great. But, nothing demonstrates dedication quite like customer service.
You should contact the customer service team on several occasions to ask them relevant questions. The aim is to get the answers you seek and to see how well the customer service team responds to you. In particular, you will want them to be able to explain principles to you.
A good lender will offer great customer service. It is important as you will be interacting with them throughout the life of your loan.
It’s also a good idea to make sure your loan includes a service-level agreement that offers regular updates and reports. These should offer you easy-to-understand information and the opportunity to talk to an account manager with expert knowledge of your loan when needed.
Most people will look at the interest rate and take the lowest option. This can seem to make sense as a lower interest rate would suggest a lower overall repayment. Unfortunately, this is not always the case. There can often be hidden costs that make the loan substantially more expensive than one with a higher rate of interest.
How do you know what's best then??!! What do we Look into??!!
The Real Cost of Your Business Loan
Transparency, transparency and transparency are the three factors that will determine how much you really pay for your business loan if the circumstances change, additional fees written into the small print mean that the lender might be able to increase the cost of the loan.
Please read the tiny details of the loan terms to ensure there are no hidden charges or conditions you need to adhere to. Some great examples that are usually overlooked are upfront fees, discharge, early exit, and even a monthly or annual charge.
One Size Fits All?
A loan gives you the money you need for your business and sets the terms of repayment. But, not all loans are the same! A good lender recognises that every business is different. It will create an array of options that can even be tailored further to suit your needs.
Of course, the lender wants their money back. But, an excellent online lender will realise that tailored options make it easier for your business to meet its commitments and repay the loan. In short, the “one size fits all” is unlikely to be the type of lender that's right for you.
Are They Credible?
Many businesses are offering to lend businesses money but not all of these have your best interests at heart. You need to check the reputation and authenticity of the lender before you commit to anything.
This means checking they have a genuine physical address, contact details that actually work, they are properly registered, and that you can see all the details of their leaders.
Alongside this, the business should be able to offer testimonials that you can verify are real. After you have verified all these details you should also check on social media and online forums. This will help to show they are genuine.
More importantly, these sites can help you to assess the lender's customer service. You should expect a few negative remarks but the majority should be positive.
Can They Back Up Their Promise?
A company has dedicated marketing to show how good their services are. They can also feature testimonials that make them look great. But, nothing demonstrates dedication quite like customer service.
You should contact the customer service team on several occasions to ask them relevant questions. The aim is to get the answers you seek and to see how well the customer service team responds to you. In particular, you will want them to be able to explain principles to you.
A good lender will offer great customer service. It is important as you will be interacting with them throughout the life of your loan.
It’s also a good idea to make sure your loan includes a service-level agreement that offers regular updates and reports. These should offer you easy-to-understand information and the opportunity to talk to an account manager with expert knowledge of your loan when needed.
The Flex Test
Finally, it’s important to realise that the market can change suddenly. The economic crash of 2008 and the pandemic of 2020 placed huge amounts of strain on many businesses. In order to handle these pressures, you need a lender that is prepared to be flexible.
That’s where Lumi.com.au steps in. They offer the Lumi Payment Pause feature that allows you to pause repayments and interest* for four weeks. It gives your business the chance to adapt to the changing market and still flourish. Of course, this facility can also be used when the economy is booming, giving you the extra funds you need to expand or seize an opportunity.
Chat with Lumi.com.au about Payment Pause today to see how they can help you realise your plans and dreams, no matter how big or small.
** This content is not intended as legal, financial or investment advice and should not be construed or relied on as such. Before making any commitment of a legal or financial nature you should seek advice from a qualified and registered legal practitioner or financial or investment adviser.
*Lumi offers the Payment Pause feature on selected term loans settled from 8 April 2021. T&Cs and eligibility criteria apply.
