{"id":30871,"date":"2018-11-09T13:03:03","date_gmt":"2018-11-09T18:03:03","guid":{"rendered":"https:\/\/www.arffinancial.com\/development\/?p=30871"},"modified":"2021-02-18T14:15:38","modified_gmt":"2021-02-18T19:15:38","slug":"4-questions-to-ask-before-taking-out-a-business-loan","status":"publish","type":"post","link":"https:\/\/www.arffinancial.com\/development\/4-questions-to-ask-before-taking-out-a-business-loan\/","title":{"rendered":"4 Questions to Ask Yourself Before Taking out a Business Loan"},"content":{"rendered":"

\"Business<\/p>\n

Business Loan Criteria<\/h2>\n

Thinking about taking out a small-business loan? Loans can oftentimes help business owners achieve their financial goals, but not always. Here, we go through several questions you should ask yourself to ensure taking out a loan is the most financially prudent decision for your business.<\/p>\n

What do I need this loan for?<\/strong><\/p>\n

It might seem like an obvious question, but it\u2019s probably the most important one you should be thinking about. Maybe you need to consolidate your other loans or buy new equipment. Perhaps you opened your business with the help of an investor and now you\u2019re ready to pay them out. Or maybe you want to open a second location. Whatever the reason, being clear on your exact needs is critical in making a key decision like this. Lenders are going to ask you how you plan to use the money they loan you, and you\u2019re going to have to be as explicit as possible. Detailing your exact needs will also help the lender determine which loan solution is right for you, whether it\u2019s a line of credit<\/a>, bridge loan<\/a>, or a working capital loan<\/a>.<\/p>\n

How much do I need to borrow?<\/strong><\/p>\n

After you\u2019ve determined exactly what you need a loan for, it\u2019s important to decide how much money you\u2019ll realistically have to request from a lender. While it\u2019s tempting to want funds in excess of your needs, remember that you are going to have to pay this money back\u2014and the more you take out, the more you\u2019ll owe (and the higher your chances for default become). Knowing the amount you need will also help you choose a lender, as most lenders have a set minimum and maximum amount they\u2019ll loan.<\/p>\n

How much can I afford?<\/strong><\/p>\n

It\u2019s one thing to know how much money you\u2019ll need, but knowing how much you can actually afford is a whole other ballgame. Bigger loans equal bigger payments and higher interest rates. So, go over your budget: Think about your business\u2019s monthly cash flow and how much wiggle room you have at the end of the month after all of your bills are paid. Determine how much money you can devote to a new loan payment. Look for ways you\u2019d be able to cut costs in your business in order to make the loan payments more manageable.<\/p>\n

\"Business<\/p>\n

How long will I be paying back this loan?<\/strong><\/p>\n

Your \u201cloan repayment term\u201d is defined as the number of months (or years) over which you\u2019ll repay your loan. ARF Financial offers terms up to 36 months, so you can choose which option is best for you (check out our loan calculator<\/a> for a better idea of your monthly payments\u2014it\u2019s free, and won\u2019t affect your credit score!). Generally speaking, if you want smaller payments, you\u2019ll want to spread them over a longer period of time. But if you want to get out of debt faster, a shorter term is more desirable (you\u2019ll also end up paying less interest, and interest rates may be lower on shorter loan terms depending on which lender you choose).<\/p>\n

No matter how you look at it, taking out a small business loan can be intimidating and scary. But our seasoned loan experts<\/a> at ARF Financial are here to help! We can work with you through all your questions and make sure you\u2019re matched with the perfect loan solution to fit your business\u2019s needs. Your personal consultant will always have your best interests at heart and will remain by your side, even after<\/em> the paperwork is signed\u2014that\u2019s a promise. Browse our offerings online<\/a> (you can shop by industry or loan type), and then contact us to learn how we can help you finally reach your financial goals!<\/p>\n","protected":false},"excerpt":{"rendered":"

Business Loan Criteria Thinking about taking out a small-business loan?…<\/p>\n","protected":false},"author":5,"featured_media":30873,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"content-type":"","om_disable_all_campaigns":false,"footnotes":""},"categories":[128,698],"tags":[212,140,215,213,218,142],"class_list":{"0":"post-30871","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-day-to-day-business-operations","8":"category-small-business-financing","9":"tag-bridge-loan","10":"tag-business-loan","11":"tag-flex-pay-loan","12":"tag-line-of-credit","13":"tag-small-business-loan","14":"tag-working-capital"},"acf":[],"yoast_head":"\n4 Questions to Ask Yourself Before Taking out a Business Loan - ARF Financial<\/title>\n<meta name=\"description\" content=\"A business loan can oftentimes help business owners achieve their financial goals. 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