6 Things to Do After You’ve Received Your Business Loan

Sarita Harbour

Sarita Harbour

Sarita Harbour is a Small Business & Entrepreneurship Columnist at Fundera and a freelance writer and entrepreneur specializing in business and personal finance. A former financial advisor, Sarita has over a decade of experience in banking. Her work appears online at sites such as Forbes, Investopedia, Yahoo!, Capital One Spark Business IQ, and Business News Daily. Connect with Sarita on Twitter @saritawrites.
Sarita Harbour

Congratulations! Your application for a business loan was approved and funded…  Now what?

You might think that’s the end of the story. After all, you got what you wanted, right? But depending on what you do once you’ve received that business loan, this could be a great opportunity to better position your business for future borrowing success—maybe even giving you access to more money at lower rates. Here are 6 things to do after you’ve received your business loan that could help you get a better deal the next time around.

1. Schedule a Business Loan Repayment Plan

Now that you’ve received the funds you were hoping for, make sure to pay that loan back so you don’t jeopardize future loan approvals. Add the payments to your monthly budget, diarize loan payments, or even better, set them up as automatic payments from your business bank account to ensure they get paid on time.

Making payments in full and on time doesn’t only keep your lender happy—it also helps build your business credit history. This’ll help you get better rates and terms the next time you’re looking for a business loan.

2. Plan For Loan Prepayment Opportunities

When you were approved for your loan, you should have been advised of any prepayment opportunities. These could mean doubling up loan payments on loan payment dates, making lump sum payments on anniversaries or other dates, or paying the entire loan off prior to the maturation date. However, some loans charge a penalty for prepaying, because the lender will be losing out on the interest they’d be earning if your loan ran its full course instead. Check into this carefully so you know how your particular loan works.

If your business cash flow will let you make a loan prepayment directly to the principal (the amount you borrowed), you could save money on interest, alongside building your credit record to show that you paid a loan off in full.

3. Check Your Credit

Once you’ve had your business loan for a few months, check your business credit rating. While not all lenders report to the business credit bureaus—like Dun & Bradstreet, Equifax, and Experian—many do. Satisfactory repayment on your loan can help improve your business credit rating.

Take note: sometimes getting top credit marks actually requires exceeding your repayment terms. For example, a rating of 100 from Dun & Bradstreet’s PayDex score is only granted when payments arrive before they’re due.  

4. Refinance Debt Into a Lower-Cost Loan

Especially if you’ve received a short-term business loan and have been making all of your payments in full and on time, you might be able to refinance that debt into a lower-rate and longer-term loan, especially if your revenue is increasing and your credit’s been improving. As time goes by and you show that you’re a responsible borrower and business owner, it could be worthwhile to refinance. This can reduce your interest rate and shave hundreds or even thousands of dollars off the cost of your loan.

5. Field Calls From Lenders and Brokers

Once you received your funds, be prepared to start getting calls from other lenders and commercial loan brokers. When a UCC lien is placed on your business, it establishes your lender’s claim on collateral used to secure your loan.

Guess what? This information is public. And enterprising industry folks search for this information, or they buy lists of businesses. That’s why you’re getting 101 phone calls after your loan’s been funded—people know that you’re in the market for a loan, and they see you as a prime candidate to borrow even more money.

Try to keep those calls from tying up your phone lines by registering your number with the National Do Not Call Registry, which should stop annoying telemarketing calls 31 days after you register.

6. Use Your Business Loan Proceeds to Grow Your Business

One last point to mention: think carefully about how you’re spending the money you borrowed. Is it an equipment loan that will allow your business to become more efficient or produce a new product? Will you expand to a new market or larger premises so you can service more clients?

Remember, a loan is a tool to help grow your business. Use it wisely, care for it, and consider it a step along the way to your future business success.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
Sarita Harbour

Sarita Harbour

Sarita Harbour is a Small Business & Entrepreneurship Columnist at Fundera and a freelance writer and entrepreneur specializing in business and personal finance. A former financial advisor, Sarita has over a decade of experience in banking. Her work appears online at sites such as Forbes, Investopedia, Yahoo!, Capital One Spark Business IQ, and Business News Daily. Connect with Sarita on Twitter @saritawrites.
Sarita Harbour

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