Business loans can be a huge detriment to a business, but it can also be a blessing. This blessing comes in the form of balance sheet debt, and overall debt to make a business seem less profitable than it is.
Unfortunately, with many lenders knowing that businesses take loans to increase their own business credit and to balance their sheets to become profitable or more profitable than they already were, they can apply strict pressure within some of their loans to ensure making as much money as they can before the loan is repaid.
This can sometimes be through unreasonable interest rates. Since lenders check every avenue and find out directly from business owners why the loan is necessary, if they believe that it is for anything other than specific investments that will bring in additional profit and the business is already profitable, they are willing to gouge customers with interest rates much higher than the loan is worth.
Often, business owners are unaware that this is the reason why rates are so much higher on business loans with one lender than another, and don’t shop around for additional rates. Those customers who do not look around for other rates usually take a 20% loan out over a 10-year period, pricing themselves out by year 9-10 depending on the lenders, rates and a few other factors.
In the end, this only damages the loan market more than it helps them. We have had to sue countless lenders to fight against a rise in interest loans that are not comparable to a standard loan. To make the situation worse, this only continues and rises throughout the years.
The more trouble that a lender looks like they will be in, the higher the interest rates and attempts to take hard working business owners money away from them. That is why companies such as us exist. We will continue to do what we can with Digital Marketing Agency Philadelphia to dissuade companies from destroying business owners needlessly.