A lower interest rate can save your company thousands of dollars over the life of a business loan. But what steps do you need to take to get a lower rate?
The interest rate on a loan reflects the bank’s assessment of the risk that you won’t repay the money. To compensate for its risk, the bank decides how much additional interest to charge you over the rate it gives to its best, most creditworthy customers.
To reduce your rate, you must persuade your banker you will repay the money on time and in full, says Paul Ciciola, Director, Credit Risk Management at BDC.
He offers these four tips to improve your chances of getting a better rate for your business loan.
1. Boost your company’s profitability