You finally received your business loan and are excited to carry on with your life. However, this is not the end of your business loan story. It’s not important whether you applied for small-business loans or 100k business loan. Once you have received it, there are a number of opportunities, which you can grasp depending on what you would like to do next. For instance, you can improve your future borrowing results or even get access to getting more money in the future.
When you apply for a business loan, a very comfortable and easy way is to use business line of credit. It is very flexible and therefore has been used for many years. Such kind of loan is especially useful when you need large cash deposits or if you have repeated cash expenses.
No matter what kind of loan you have received, here are some useful tips that will assist you in getting an even more profitable deal next time.
Remember to Pay Back Your Business Loan
Once you have received the money, don’t forget to plan your business lending repayment. This will prevent you from getting rejections the next time you try to apply for a loan.
Remember to add monthly payments to your budget. You can either write the payments down in your diary or set up automatic payments using your bank account. The second way is even better, as it will make you feel relaxed as your monthly repayments will be paid back on time.
Even if you received a small business loan, making the payments on time will help to create your business credit history, which may lead to better terms and rates in the future.
Loan Prepayment Possibility
After you have been given the loan, take some advice concerning prepayment possibilities. Sometimes it can mean doubling loan payment dates, making big sum payments on special occasions, or paying full loan before the repayment date. Nevertheless, you can sometimes get a penalty for loan prepayment, as for the lender it means they will lose interest.
Maybe loan for a small business isn’t that strict, but it’s better to check this information carefully in advance so that you know all your loan terms and conditions. In case you can prepay the loan to the principal right away, you can also save money and avoid interest and at the same time build your credit record.
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Check Business Credit
Another useful tip is to check the rating of your credit once in a while. You can start after a few months of having your loan. Don’t get confused thinking that lenders don’t report to Experian, Dun & Bradstreet, Equifax, and other business credit bureaus. A lot of them do, so in order to improve your business credit rating, you should have sufficient loan repayment.
Bear in mind that sometimes the lenders give top marks only if you exceed the terms of repayment. This can mean if you want to get a 100, your payment needs to arrive before the due date.
Consider Refinancing Your Loan
Another opportunity to make your loan longer-term and lower-rate is to refinance it. It concerns short-term loans, which you have been repaying on time. When your income starts to increase and your business credit improves, you have even more chances for it. Having proved you are a responsible and trustworthy borrower can make refinancing worth as well as reduce the interest rate.
Getting Calls from Other Lenders
After your business loan has been funded you will start getting hundreds of phone calls from other lenders and brokers. Why does it happen? It happens because the data about your business loan history is public and therefore accessible to other business industry people. That’s why they know about your loan and understand that you are a potential candidate to borrow money again in the future.
Business Loan Income
The last important tip is to think thoroughly about the way you are going to spend your business loan. Maybe the borrowed money will help you make your business more efficient or attract new clients. Don’t forget that loan is aimed at helping your business grow. If you use it wisely, you will get more profit and your business will expand.
P.S.: Always separate personal and business finance.