Access to capital is tight and lending institutions are increasingly more cautious about lending money. This means that qualifying for a loan or line of capital for your business may be challenging, but West Center would like our clients and the local business community to consider the downside of pursuing capital from online lending platforms that offer terms such as same day loan financing. You may have seen these companies advertise on the Internet or on television extollling the ease and speed of funding. However, the actual lending rates and fine print may be overlooked by small business owners who are anxious to access funds. For example, automatic daily payments may be required, interest rates may be significantly higher than traditional lending institutions (30% to 60%+ interest rate!), and some agreements may require a personal guarantee, which nullifies the protections of an LLC. This type of lending is called predatory lending and you can learn about the pitfalls of these loans here.
In short, the speed of funding should not be the only consideration when accessing funds for your business. If you are in need of a small business loan, please contact West Center and your advisor so we can assist you with your business plan, financials, and other documents required for a successful loan application. We may also have suggestions for raising your credit score.
West Center has relationships with local lenders, including mission-driven lenders who consider other mitigating factors, in addition to the traditional five C’s of lending (character, capacity, capital, conditions, and collateral). Lenders like Community Development Financial Institutions (CDFIs) provide credit to underserved markets like small business owners and focus their lending locally.
Protecting the assets and future of your small business is our business. Call West Center for help with your small business loans!