With a variety of options and benefits, there may come a point when you find yourself searching for a small business loan. Since this is such a big financial decision, it’s critical that you take your time and only sign on the dotted line when you’re 100 percent confident in what you’re doing. 

One of the best ways to clear the air is by addressing any and every question that comes to mind. Here are some of the most common:

1. How do you plan on using the funds from a small business loan?

It only makes sense to apply for a small business loan if you have a specific reason for doing so. This can be anything from expanding your office space to buying new equipment. As long as you know how you’ll use the funds, you can hit the ground running once the money arrives in your account. 

2. How much money do you need to borrow?

This is where many small business owners make a mistake. They assume that borrowing more is better, and it ends up putting them in a compromising position in the long run. 

Calculate how much you need to borrow — as accurately as possible — and then apply for that amount. Remember, the more you borrow the higher your monthly obligation. 

3. Are you confident in your ability to repay the funds in full and on time?

This is a question you can’t afford to ignore. If you have any doubts, it’s best to hold off for the time being. Borrowing money that you can’t afford to repay in full and on time will add unnecessary stress to your life while also putting the health of your business at risk. 

4. What type of small business loan do you want?

There’s more than one type of small business loan, so you’ll want to connect with several loan professionals — at both local and national banks — to learn more about your options.

Also, the U.S. Small Business Administration has several loan programs to consider. This is a good place to start, as it’s often the best way to secure competitive terms. 

Final Thoughts

These are the types of questions you need to answer before applying for a small business loan. If you ignore these and take the first loan you find, it could come back to cause you more harm than good in the long run.

Do you have any experience applying for and using a small business loan to grow your company? Were you happy with your decision? Is there anything you would do differently the next time around?