Banks & credit unions, CVs & angel investors, and government-backed loans, like SBA loans, are dominant funding options in the business ecosystem. They have one thing in common: bureaucratic procedures and strict requirements.
That makes it hard for small business owners to access capital from these traditional sources. Things switch from harder to impossible for foreigners without a social security number.
Things have been changing with the rise of fintech lenders. Online lenders use computing technology to process business loans quickly without systemic racism or gender bias. Even some online lenders provide ITIN loans to immigrant business owners. An ITIN loan beneficiary can be anyone without an SSN.
When to Request a Fast and Low-Interest Loan?
There’s no benefit in obtaining business credit at unfavorable terms. High APRs increase your borrowing costs, monthly installments, and repayment terms, which add to your operating expenses. Whether you want to finance an emergency or regular operations, you should look for low-interest loan options.
Unique cases that may require you to request fast and low-interest loans include:
- Purchase inventory
- Buy business equipment
- Fund expansion projects
- Consolidate high-interest business credit card debt.
- Cover payroll and cash crunches
- Settle emergency expenses.
Whatever your needs, it’s advisable that you do your due diligence before making the final decision so that you can determine whether the loan will have decent ROI, which leads us to the next topic below.
5 Aspects To Consider When Applying For A Business Loan
Check your credit score
Qualifying for a business loan at favorable terms stops with your FICO score. Lenders use it to determine the loan amount you qualify for and the terms to approve it.
If you have a good to excellent credit score, you stand a chance to qualify for large loan amounts at the best terms, which helps you save on interest costs.
If you have a poor to fair credit score, you may either get turned away or get approved for a lower loan amount at unfavorable terms, which increases your borrowing costs.
In this case, you are better off borrowing from an online lender than traditional lenders.
Research Lenders
Armed with your credit score, start searching for genuine and trustworthy lenders. Look for lenders with secure websites, available customer service, and positive reviews & ratings from past customers.
Again, check whether the lender is registered with your state’s attorney general office or whether they have any positive accolades on the Better Business Bureau’s website.
Avoid lenders who promise quick, low-cost business loans at unrealistic terms, like extremely low rates with no credit check. Such deceptive offers come from scammers.
Comparison-shop lenders
Once you’ve identified and come up with a list of genuine lenders, the next step is to sift them based on the ease of their application process, interest rates, loan terms, and approval period.
Since you need a low-cost loan within a short period, go for a lender who has a quick application process, the lowest rates, little to no fees, and a fast approval period.
The point is, you should look for a lender who’s willing to work with your credit score and approve you for a loan quickly at the best favorable terms possible. Online lenders are your best bet in this category.
Determine your costs
Don’t allow the urge to get funds faster to eclipse your thinking. Keep in mind that a loan isn’t free money, and you’ll need to repay it later, so you should be careful not to borrow more than you can repay.
To ensure you’re getting a good deal, use a business loan calculator to nail your total costs. Genuine, transparent lenders include a business loan calculator on their websites to help you calculate your interest costs, monthly installments, loan fees, and repayment terms.
With that information at your disposal, you can refrain or jump in with confidence.
Get pre-approved
Prequalifications are vital to ensure that your preferred lender can approve the amount you want. Reputable lenders perform a soft credit check so that you can see the loan offers you qualify for without affecting your credit score.
If the lender does not offer what you want, you can check the next one on your list. Most lenders offer free pre-approval, and you may need to avoid the ones that charge non-refundable fees for it.
Once you get pre-approved and accept the loan terms, simply provide the required identifications and small business documents to make the final applications.
Fund Your Business with ITIN Loans
ITIN loans are meant for foreigners without a social security number. Currently, immigrant business owners can obtain these loans from a select online lender.
Visit the link in the intro to learn more about ITIN loans and how they can help you launch and grow your business.