If you are looking to fund your company in the near future you have a few options. If you run a small company, you may be able to borrow from friends and family, otherwise you can try to seek venture capital from investment firms. Also, you can try to borrow money in the form of unsecured small business loans. We will be discussing some things to avoid when using this form of borrowing in today’s discussion.
1) If you are in need of funding for a large scale project do not look to high cost non-traditional lenders. It can be very frustrating trying to get approved for a “good” loan but remember that you will have to pay the loan back, and if the interest is too high chances are it will not be worth the investment. If you can’t get a loan within your price point, you should seek other means of funding your company. Conversely, if you require immediate funding, a bank may not be the best place to look. Most banks have multiple layers of approval requirements, and some even decide whether or not to disburse funds based on the decision of a board! If you have an emergency you need money fast, and non-traditional lenders like those you can find online are most likely a better match.
2) Never do business with a company you haven’t independently verified. You should start by checking the better business bureau website to see what their grade is. If they have many unresolved complaints lodged against them, you should probably avoid them. But not everyone deals with the BBB and so you should do a quick Google search to see if there are 3rd party evaluations of them, chances are they have an online presence that they don’t control and you should tap into this to get the inside scoop before signing on the bottom line.
3) Last but definitely not least, never sign anything you don’t fully understand or agree to. Do not expect to be able to modify a signed document at a later time. The time of signing is the time to get it right. Also, don’t fall for bait and switch techniques where the terms suddenly change from what was discussed at the last second, stick to your guns and get small business loans that meet your needs.
Remember, this is just the top 3, always look at your loan and lender with a critical eye and avoid anything that seems like a bad deal.