Lender Tip of the Week – 3 Mistakes to Avoid
When it comes to helping companies get small businesses loans, Fundera wants to make the process as easy and transparent as possible for borrowers. Not only do we cut down on the amount of paperwork, but we also find new ways to inform and inspire small business owners.
This is the latest in an ongoing series in which we ask our trusted partners to share their best lender tips for prospective borrowers.
This week, Martin Franco, the Director of DLJ Financial’s Equipment Finance and Business Capital Division, shares the 3 biggest mistakes small business owners make when leasing equipment.
1. When business owners look into equipment leasing, they often focus on the interest rate and choose the lender that offers the lowest monthly payment, Franco says. But instead of worrying about the interest rate, it’s often better to look at the term of the lease. A shorter term lease, even at a higher interest rate, can often save you money over the term of the lease.
2. Business owners frequently don’t examine the actual benefits of the equipment they’re leasing. For instance if the piece of equipment helps generate $1,000 a month, than a lease that costs “only” $1,200 is not worth it. Before you lease any equipment, look at the ROI it will (or won’t) generate on a monthly basis.
3. Although it may be tempting, it’s a mistake to compare interest rates with your friends. Interest rates are based on individual factors, such as your credit score, your financial and business history and revenues.
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