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Fundation, discusses types of lenders to approach based on your business situation. See also, choosing a loan type, acquiring a business, Fundation FAQs and Fundation Business Loan Calculator.
When trying to find the right type of lender for your business, the options available can seem endless. Just Google the words “small business loan” and you’ll see dozens of lenders all claiming to offer the same things: Instant Decisions! Competitive Rates! No Collateral! Approval in One Day! It can be difficult to know where to start.
Comment: In the investment industry, the term “tyranny of choice” is used frequently: When an investor is faced with so many options (thousands of mutual funds, for instance), the investor will simply choose to make no choice at all rather than sift through the dizzying array of options. In fact, behavioral scientists will tell you that an abundance of choices is exhausting, not exciting. Studying the landscape of small business lenders, we wonder if business owners face a similar conundrum when they seek financing.
An informed business owner needs to be able to distill this complicated decision-making process down into smaller parts.
Start by asking yourself these six questions. Your answers will help you see how well your current situation fits the typical features of the different types of lenders.
After you’ve answered these questions, you’ll be able to decide which type of lender to approach. Here are the main features of the five types of lenders on the market:
Merchant Cash Advance
Factoring / Accounts Receivable Financing
Brokers & Online Referral Platforms
Online Direct Lenders
For additional information, see choosing a loan type, acquiring a business, Fundation FAQs, and Fundation Business Loan Calculator.
Learn more about CT Corporation’s relationship with Fundation and visit Fundation today.
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