An entrepreneur will always require financing, either to start the business projector to strengthen and expand his company. The vast majority of the time, it will be necessary to go to a financial institution to request a business loan. But, since there are many possibilities in this market, it is most convenient to avoid making a hasty decision and meditate on your choice of financing. The comparison should be your method. SkyCap Financial specializes in helping people with low credit or poor credit get the financial assistance they need. Founded in 2013, Skycap Loans has become one of Canada’s premier personal lenders, offering loans to individuals across the country.
When evaluating and comparing the different banks or financial institutions that can grant you the required credit, it is essential that you review a wide range of factors to choose the financial offer that best suits your business. Here we present them:
Analyze the use:
It is important to define what is going to be used (working capital, remodeling, property acquisition, growth) because the type of finance that must be sought depends on it.
Check if you are a credit subject:
Some banks evaluate only the cash flows of the companies and others evaluate their ability to pay, based on their financial statements.
Identify the area of the bank you will go to:
Within the banks, there are different types of banks that provide services to companies according to their sales levels.
The total cost:
Analyzes the characteristics of the credit. The total cost of financing, known as effective cost, is the most important criterion you should observe when comparing the different alternatives.
This element refers to the real rate that you will have to pay for the loan and is made up of the interest rate, plus other additional costs that are usually included in the loan, such as the granting or maintenance expenses.
It is the period of time granted by the financial institution to return the loan and pay the interest. To choose according to your payment capabilities, it will be useful to understand the following: in the shorter term, the interest rate is usually lower, but the fees to be paid are higher; while if the term is longer, the interest rate will also be higher but lower the fees to be paid.
The rate type:
It can be a fixed interest rate, a variable interest rate, or a combined rate.
The fixed rates remain constant during the period of the skycap loans, the variable rates are adjusted according to certain parameters, and the combined rates usually start being fixed rates and then become variable rates.
The fixed rates allow knowing in advance what the quotas will be and, therefore, they give control and the security of knowing how much we are going to pay. While the variable rates present the uncertainty that they may increase at any time, but, in general, they are lower than the fixed rates.
This indicates the way in which the capital is going to be amortized and, therefore, repay the loan. The most used method is French, where the fees are fixed and in all periods the same fee is paid.