Have you ever entered into a deal where it looked SO good, but after you signed up for it, you discovered that it wasn’t the deal of the century like you thought?
Getting business finance is often exactly the same. A lot of business lenders will lure clients in with a cheap interest rate, but there is SOOO much more to a loan than the interest rate.
The interest rate is just one small part. What about monthly fees that you weren’t told about in the glossy online ads? What about the massive upfront fees of thousands of dollars that you have to physically have to pay just to get your loan assessed?
All of a sudden, your other business loan is not looking that cheap anymore, is it?
And what about flexibility? Does the elcheapo loan allow you to extend if you need more time, and without any penalties? What if you want to pay out early? Can you do that without any penalties.
Often, the answer will be NO.
And then there is the speed. The business bridging loans and 2nd mortgages with the phoney cheap interest rates often take 1 – 2 weeks to settle, as these lenders will want you to pay thousands of dollars up front so they can do a full valuation on YOUR property. If you need the money by the next business day, what use is that to you? Plus, there is no guarantee the valuation will come back favourable, so you may waste 2 weeks and thousands of dollars for nothing.
So beware of the little hidden traps that exist out there.