Learn: comparing loans

How to build a sensible shortlist of business lenders

Searching for business finance can surface dozens of providers, and comparing all of them in depth is impractical. A short, structured process turns an overwhelming list into a manageable shortlist of two or three options you can examine properly.

Step one: define the need

Write down what the money is for, roughly how much you need, and over what period you expect to repay. This single sentence rules out a surprising number of providers straight away.

Step two: filter on eligibility

Remove any lender whose criteria you clearly do not meet. There is no point comparing a facility you cannot access. Credicorp, for example, lends only to UK limited companies and LLPs for business purposes.

Step three: filter on structure

Keep those whose repayment shape, flexible or fixed, suits your cash flow. Drop the ones that would fight against how money moves through your business.

Step four: compare the finalists

  • Total amount repayable across the term.
  • Early-repayment terms.
  • Whether anything is secured or guaranteed.
  • Who you contract with and how they handle difficulty.

Then decide

By this point you are comparing a few genuinely viable, suitable options on the things that matter, rather than drowning in a long list. If Credicorp is on your shortlist, the cost and term that apply to you will be set out clearly in your offer.

See also: A simple framework for comparing business finance options, How to compare early repayment terms across lenders and Red flags to watch for when comparing business lenders.

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