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5 Must Ask Questions before You Apply
for a Business Loan
By Steve Maleh
Article Summary: If you are not prepared to apply for a small business loan,
you may feel like an ordeal. Until applying for a company loan to help you plan
and put your best foot forward, herearefive questions you should ask yourself.
Taking the time to properly analyzeand train yourself before meeting a lender
may not be a guarantee of success, butit will allow you to boost the chances, so
make surethat you consider the following:
1. Why does my business need financing?

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2. What are the minimum funding conditions to qualify?
3. When I apply, can the lender make a hard pull on my personalcredit?
4. What are the gross capitalcosts, interest rate and APR?
5. Does this lender make my good credit report?
Before you make a final decision, asking yourself these questions will not only
help you plan for your query, it will also help you make decisions about any future
lender. Continue reading, to know more.
When you are considering applying for a business loan, there is a lot of decisions
to make. Itcan get complicated, daunting and damaging to your personal
reputation if you're not careful.
So, before you submit any applications with potential small business lenders, I
want to sharethese 5 important questions with you before you even start the
application ... and why you should ask them.
1- Why is it that my business needs financing?
Your financing intent will decide many of the factors that affect your decision-
making. If you know whatyou need to fund your business, you'llbe able to
answer many of the other questions you'll need. The cause, or intent of your loan,
will decide how much you need, whether you should choose a term loan or credit
line, whatpayback options your cash flow can manage, and how quickly you need
the money, are justa few of the many other factors that will influence your
financing decisions. Theseanswers will help you get to the best financing options
for your business.

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2- What are the minimum requirements for financing your business?
Knowing the minimum conditions for a loan will help you narrow down the
lending choices for which your business is likely to apply. This will save you time
and energy before filling out applications even get started.
3- Should the lender make a hard pull on my personal credit when I
apply?
An investigation into your personalcredit background is part of any financing
application. Some lenders, like OnDeck, can determine your creditworthiness by
making a "soft" pullthat doesn't show up on your credit profile and doesn'taffect
your personalcredit negatively. Some lenders do, however, makea "hard" pull on
your personalcredit, and it's reported on your credit report, which can be
detrimental to your personalreputation and your ability to apply for funding
elsewhere.
4- What are the gross capital costs, the interest rate and the APR?
If a lender provides financing for your company, they will show you the rates
associated with your loan. Many borrowers and business owners concentrateonly
on the APR (Annual Percentage Rate) or AIR(AnnualInterestRate), so you can
always inquire aboutthe overall borrowing costs so that you can see exactly how
much you are paying back.
Some annual rates (APR / AIR) can look confusing for strong short-termloans.
Have your lender explain your cost as cents on the dollar (you pay back 7¢ for
every dollar borrowed) or as the total cost of the loan. (will you pay back $11,000,
$12,000, or $13,000 for a $10,000 loan). Theseestimates, in addition to APR or
AIR, makeit easier to understand the true costof the loan and enable you to
make the best financing decision for your company.

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5 – Is this lender going to disclose my good credit background to the
related business credit bureaus?
Some online lenders do not discloseyour lending and payback habits to major
credit offices. If you want your good payback habits to havea positiveeffect on
your creditworthiness for the futureand constructyour business credit, confirm
that any lender you take to the correctbusiness reputation offices from disclosing
their loans.
Author Steve Maleh
A seasoned businessman and 3rd generation entrepreneur, Steve
Maleh has founded and started dozens of businesses over the
past twenty years. From retail, to restaurants, to technology,
several of which were sold, and several of which are multi-million
dollar operations today.
Prior to his venture into the mobile space, Steve used his
Architectural degrees to build, develop and renovate over 30
million dollars in real estate.
In addition to his own businesses and ventures, Steve has been
actively sharing his expertise and knowledge with other
entrepreneurs. Acting as an angel investor in several start up
retail businesses.
Steve Maleh holds a Bachelors degree in Architecture and
entrepreneurship from the University of Miami, and has also taken
master classes at Columbia University in real estate developing
and entrepreneurship.
Steve is currently looking forward to being part of the future
innovation in the theatre application market with the launch of his
new technology venture SNAX®.