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Auto & Car Loans: A Checklist for Comparing Options
Compare the car price and the financing separately.Start with the amount you will actually financeRequest an itemized out-the-door price, then subtract the down payment and any positive trade-in equity. Identify taxes, dealer fees and optional products separately. A service contract added to the balance costs its purchase price plus the interest charged to finance it.If the trade-in is worth less than the existing loan payoff, the difference is negative equity. Rolling that gap into a new loan increases the new …

Business loans can finance operating needs, equipment, a purchase or expansion. A term loan and a revolving business line solve different cash-flow problems. Before looking for a provider, describe the use of funds and how the business expects to repay.

How the borrowing arrangement works

Prepare current financial information and a realistic cash-flow forecast. Ask whether the product requires security, a personal guarantee or a minimum trading history. Keep the business’s obligations separate from assumptions about consumer-loan protections.

Costs and repayment

Compare the payment frequency, full financing cost and any prepayment terms. Daily or weekly collections can affect cash flow differently from monthly payments. In the United States, SBA programs include 7(a), 504 and microloans, each with a different purpose and requirements.

Preparing to compare offers

  • Prepare a use-of-funds budget, bank records, financial statements and a realistic cash-flow forecast.
  • Ask about business age, revenue, ownership, industry and credit requirements for the specific program.
  • Identify collateral and any personal guarantee, including who is responsible if the business cannot repay.

Questions worth asking

  • What business need will the funds cover?
  • Is a personal guarantee or asset security required?
  • Does the repayment match the business cash cycle?

A factor rate is not an APR

If an agreement describes repayment using a multiplier, calculate total dollars due, deductions and payment frequency. For example, $10,000 multiplied by 1.3 is $13,000 before other fees, but the multiplier alone does not describe the annualized cost.

Does SBA approve every small business?

No. Eligibility and lender requirements apply, and the programs have different purposes.

Is a merchant cash advance the same as a loan?

It may have a different contractual structure. Compare it separately and review the actual agreement.

BorrowCompass provides a guide to this topic at business loan lender requirements. Review current provider terms before making a borrowing decision. BorrowCompass does not issue loans or guarantee approval.

Small Business Loans: A Checklist for Comparing Options

Bad Credit Loans: A Checklist for Comparing Options
Compare the offer your circumstances produce.Separate your credit history from the loan structureBad credit describes a borrowing situation. The product underneath may be secured, unsecured, short term or repaid in installments. Start by identifying that structure, then ask how the lender evaluates your current income, existing debt and credit information.Before applying widely, review the report information being used and address inaccuracies through the reporting company and information provider. Compare any available preliminary offers without treating them as guaranteed approval. Ask …
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