Startups need funds to get off the ground. While it would be fantastic to have the thousands needed to jumpstart a new business, most small business owners have to take out a loan or two. Of course, with loans comes high interest rates that accumulate over time and can leave many owners suffering from massive debt and loss of income even after their businesses have taken off.
In order to make sure that your business becomes as profitable as can be, you have to start financing before you begin to operate. Doing so ensures that you will safe yourself thousands of dollars down the line and not spend all of your newfound revenue on loan repayments. Let’s take a look at how you can lower your interest rate for a small business loan.
Know Your Numbers
In order to avoid exorbitant interest rates, the best thing to do is have a solid idea of exactly how much money you’ll need to start your business. You shouldn’t take out more than the bare essentials.Remember, this is to start your business, not run it. The goal is to launch a service or product line that brings in enough money to sustain itself.
Compare small business loan interest rates online. Although it may be tempting to go to the place with the best quote on the table, it may be a better idea to take less money for lower interest rates. Doing so will enable you to prioritize your business and put the money where its absolutely essential.
Check Your Credit Report
You are entitled to one free credit report annually. Get a copy of yours and correct anything on it that may cause you to receive higher interest rates on your small business loan. This includes overdrawn or inactive accounts, late bill payments and unsettled disputes.
Although it requires some extra work, putting in the additional effort to secure the lowest interest rates on your business loan will ultimately lead you to greater success and a much fuller bank account.