Ten Things to Consider When Shopping for a New Lender

Clients often get caught up in the headline interest rate, advance rate and line amount when comparing deals. Here are ten other factors to consider when shopping for a new lender, which may be as or more important.

1.  Origination fees – are you required to pay Origination points, Closing costs and field exam costs?
2.  Minimum Contract Term and Termination fee – are you tied to a term or can you terminate at any time without a fee?
3.  Unused Line fees – are you paying fees just for privilege of maintaining a line?
4.  Lender Growth – will the lender be able to grow with you?
5.  Intelligence Sharing – will the lender share intelligence with you, such as, customer credit reports, lien monitoring and Tax liability monitoring?
6.  Flexibility – can the lender support occasional special requests like exceeding concentration limits on a customer, over-advance on an invoice or being patient when a customer payment is delayed?
7.  Other products – can the lender support other financing needs like Term Loans, Purchase Order Financing and Equity Financing?
8.  Team player – is the lender willing to work with your existing lenders or future lenders? Is the lender willing to act as a bridge to future financing or equity raise?
9. Lender’s Experience – does the lender have experience in your industry? Does the lender have experience with companies of your size and your stage of growth and maturity?
10. Referrals – is lender willing to provide referrals for other partners you may need, such as, banks, accountants, angels/VCs, lawyers, customers and clients?