Financial tools & management

You pay your bills on time, you don’t have any credit card debt, and overall, you consider yourself fairly responsible when it comes to spending. You’re ready to apply for a credit card or loan to help you get your future business off the ground, and all of a sudden, you hit a road block. Your request is denied and, upon further research, you find that you have a “thin credit file.”

Bank loans are usually the least expensive way to finance a small business. However, it is not easy to get a bank loan, as banks have strict standards for lending. As a general rule of thumb, banks will require a borrower to put up collateral for a loan. The only exception to this rule is for clients who have a long-term relationship with banks and whose business has proven to be profitable over a multi-year period.

When you get a term sheet for a term loan, you will likely be quoted an interest rate, repayment term (between 1-5 years), and other associated fees, such as an origination fee or monthly administration fee. First calculate the dollar amount of the added fees, then plug your terms into the calculator below to find out the true cost of your loan offer.

Bank loans are usually the least expensive way to finance a small business. However, it is not easy to get a bank loan, as banks have strict standards for lending. As a general rule of thumb, banks will require a borrower to put up collateral for a loan. The only exception to this rule is for clients who have a long-term relationship with banks and whose business has proven to be profitable over a multi-year period.

You have a right to see the cost and terms of any financing you are offered in writing and in a form that is clear, complete, and easy to compare with other options so that you can make the best decision for your business.