How do you get better terms and conditions from your small business lenders?

2 Shop around

One of the best ways to get better terms and conditions from your small business lenders is to compare multiple offers and negotiate with them. You should not settle for the first offer you receive, or the one that seems the easiest to get. You should research different types of lenders, such as banks, credit unions, online platforms, alternative lenders, or government agencies. You should also consider different types of loans, such as term loans, lines of credit, invoice financing, or equipment financing. By shopping around, you can leverage your options and find the best deal for your small business.

3 Build relationships

Another important factor that can influence your terms and conditions from your small business lenders is the quality of your relationships with them. You should not treat your lenders as mere sources of funds, but as partners who can support your business growth. You should communicate with them regularly, update them on your progress, and share your challenges and opportunities. You should also pay your bills on time, maintain a good credit score, and avoid defaulting on your obligations. By building trust and rapport with your lenders, you can improve your chances of getting better terms and conditions in the future.

4 Improve your cash flow

One of the main criteria that lenders use to evaluate your creditworthiness and your loan terms is your cash flow. Your cash flow is the amount of money that flows in and out of your business on a regular basis. It shows how well you manage your income and expenses, and how much money you have available to repay your debts. To improve your cash flow, you should optimize your pricing, reduce your costs, increase your sales, collect your receivables faster, and pay your payables slower. By improving your cash flow, you can increase your profitability, reduce your risk, and enhance your bargaining power with your lenders.

5 Ask for feedback

Finally, one of the most effective ways to get better terms and conditions from your small business lenders is to ask for feedback. You should not be afraid to ask your lenders why they offered you certain terms and conditions, and what you can do to improve them. You should also ask them for suggestions on how to improve your business performance, your financial management, and your credit profile. By asking for feedback, you can learn from your lenders, identify your strengths and weaknesses, and implement changes that can benefit your business and your financing options.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?