Despite the trying times, we are in and how there are still shifts and changes going on to enable us adapt, a lot of people are still thriving.
Call it luck, as a result of their ‘planning ahead,’ or just being able to adapt to the times we are in, quickly, some people are still closing deals, getting jobs and adding more investments.
Businesses are scaling up and joining the global market.
While we emphasise on the need to stay safe and to survive, there is no reason why you should not be able to smash your set goals.
It may not be as easy as before, but you can still secure the loan you need, to take things to the next level.
Various types of loans you could go for include the following:
This type of loan is commonly offered by banks. To secure the loan, an asset, collateral, or security is required and is, usually, returned after the loan has been paid back.
This is to ensure that the borrower is compelled to pay. Should the borrower default in payment, the lender has a right to take possession of the collateral.
With secured loans, you can borrow a large sum of money. Interest rates are low and loan can be paid back, over a long period of time.
This type of loan does not require a collateral. As a result, interest rates are normally higher, due to the high level of risk for the lender, especially, in case the borrower defaults.
This type of loan falls under the category of personal loan. You are required to pay back, but you do not have to put up your house, or car as collateral.
While the mortgage is a personal loan, usually, taken to purchase a home, it is, also, another means of securing loans.
When you apply for a mortgage, you pay a portion of your monthly paycheck to the lender, or bank that has given the loan.
In case you are unable to make payments, the lender is legally allowed to repossess the property, to recover their funds.
Tips for Securing Loans include the following:
Cash flow cycle
The cash flow from your business operations is one of the most important factors, for securing loans.
A lender’s primary concern is, whether your business operations will generate enough cash to repay the loan.
Your cash flow shows how your major cash expenditures relate to your major cash sources.
This information gives a lender insight, into your business market demand, management competence, business cycles and any significant changes in the business, over time.
Deliberately keeping track of your cash flow is, therefore, super important. It could be the major determinant that spins things in your favor.
Lenders will want to review, both the credit history of your business, if the business is not a start-up and your personal credit history.
This is because a personal guarantee is, often required, in the case of a small business loan.
It is advisable to obtain a credit report on yourself and your business, before you apply for a loan.
This will uncover any inaccuracy, or problem, so you can correct them.
If possible, you can, also, find out the credit reporting company that your prospective lender uses and request a report from that company.
The bulk of what lenders lookout for, revolves around the history of capability, cash flow and what securities are in place, to offset risks.
This is, in case payment plans do not come through as agreed.
There are tons of materials that will guide you, should you decide to get a loan.
For whatever purpose, carry out proper research and deal with the loopholes that can hinder you, from getting a loan.
Even with the pandemic, securing loans, scaling your business and generally thriving, are still possible.
Featured Image: invoice.ng
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