Hitachi Capital Franchise Finance reveals what else you can look for in a lender
The cost of credit is an important factor when choosing a lender, but there are other things that should be considered when choosing whether a product is right for your business.
There are many elements to take into account in advance of approaching a lender for finance, including:
- Which lenders have the risk appetite to meet your needs?
- Will that lender provide the level of support you require/desire?
- Who can facilitate your needs quickly and effectively?
- Does ethical practice mean something to you?
Let’s take a deeper look:
Your eligibility and the lender’s risk appetite
Lenders will offer an array of financial products that provide opportunities for business owners to get the funding they need. However, with lending large sums of cash comes an element of risk for the lender. Each institution will have its own eligibility criteria for credit and appetite for risk. It’s important to consider your credit history, as this plays a key part in the lender’s decision-making process alongside its eligibility criteria. The appetite of the lender is something your broker if you opt to use one, should have knowledge of. If you don’t use a broker, it’s advisable that you speak to several banks and non-bank lenders.
A personalised customer experience
We all appreciate that finance can be quite complex. Some people might be well versed in this area, while others may wish to focus more on where their time and skills are better placed.
There are highly responsive and attentive lenders that are equipped to provide a support platform and can navigate you through the complexities of funding.
Evaluating whether your business goals will be better achieved and by how much is important when weighing up if a bespoke service could be beneficial.
Speed and efficiency
How soon do you need the finance?
Processes and technology are continually improving, helping lenders make faster and more accurate financial decisions and allowing them to provide funding to the customer more quickly.
Depending on the size and complexity of your finance proposal, finance can be delivered within a matter of days or it could take months.
Some lenders will also have the capacity within their workforce to process your proposals during busier periods, so they may be able to provide certain products at a faster pace than others.
Sustainable development and ethics
With a greater focus in the modern world on sustainable and ethical practice, you may want to look at projects your prospective lender has worked on that have contributed positively to protecting the environment.
You may want to work alongside a business with values that are aligned with your own.
Are you making the right choice?
There is no right or wrong answer when deciding between finance providers, whether bank or non-bank.
However, it’s crucial that either you or your broker take the time to chat with each one and research the products on offer to ensure you’re making the best decision.
These are challenging times, so you must ensure the decisions you make fit the needs of you and your business.