One of the most important kinds of currency you have as a small to medium business owner in New Zealand is time. And unfortunately, it’s always tight. Between managing staff, chasing invoices, and keeping your customers happy, the idea of spending hours comparing lenders probably feels like another job you just don’t have the energy for.
So, when cash flow gets tight, it can be easy to jump at the first lender you find. Quick approval, easy application, money in the bank… sorted, right? Not quite. Choosing the first lender you find might feel convenient, but it can actually cost your business far more in the long run.
This is why a business loan comparison is so important. We think you should always explore your options, so read on for a clear breakdown of why slowing down is important, and how to compare your business loan choices.
Convenience is Great, But Costly
When money is tight, urgency often starts driving decisions above all else. That’s how plenty of businesses end up with loans that carry higher interest rates than they can handle, or hide fees in the fine print. These loans generally don’t scale with your needs, and they can lock you into rigid or inflexible terms that – while fine at first glance – are actually a straitjacket on your cash flow.
In other words, you end up with a loan that eats into your margins and limits your flexibility. Exactly the opposite of what your business needs. So yes, convenience is vital if you’re trying to move fast, but knowing how to do a business loan comparison is a vital skill set as a budding business owner, especially if you want to scale!
How to Do a Proper Business Loan Comparison
The good news is, you don’t need to be a finance expert to make smarter borrowing decisions. As a small to medium business owner, you just need to know what to look for. Deciphering loan terms will help you know what you’re in for before signing on the dotted line.
Interest rates and fees.
Don’t just look at the advertised rate. Ask about the total cost of borrowing. That means all fees, charges, and penalties. A slightly lower interest rate might still be more expensive overall if the hidden extras are high.
Flexibility.
Businesses aren’t static, and your lending terms shouldn’t be either. Check whether you can repay early without penalties, top up if needed, or adjust repayment schedules when cash flow gets bumpy.
Speed vs. transparency.
Yes, speed matters, but it’s not to be confused with convenience. A great lender will be both fast and upfront about costs. If they’re rushing you to sign without explaining the details, that’s a red flag.
Customer support.
A significant aspect of any business loan comparison is assessing how well-supported you feel by a potential lender. You want a lender who sees you as more than a transaction. Non-negotiable. Check reviews, ask around your network, or check out the social proof on their website to verify if they are the lenders you’d like to work with.
At Spinach, we make an effort to make your business loan comparison simple by presenting all of this information upfront. That said, not all loan companies have the same philosophy, so make sure to do some serious digging on your options (and consider how important transparency is to you before signing on).
The Long-Term Value of A Good Pick
Here’s the thing: your first loan probably won’t be your last. The lender you choose today can set the tone for your future business growth, so it’s worth taking the time with your business loan comparison to verify who you’ll come back to again and again.
If you pick a lender who offers a transparent way of communicating and a flexible approach to lending, then you’ll also:
- Free up cash flow instead of choking it.
- Build a trusted relationship you can lean on when bigger opportunities or challenges arise.
- Spend less time worrying about debt and more time growing your business.
Compared to being stuck with an expensive, rigid loan that you regret six months down the track, that’s a huge difference. Because yes, convenience is tempting, especially when you’re under pressure. But picking the very first lender you find without doing a business loan comparison might just be one of the most expensive decisions your business makes.
Though it takes a little bit of extra time at the outset, comparing your options to find a business lender who values your success as much as you do is always worth it. By investing that time, you significantly protect your margins, cash flow, and long-term growth.
So before you sign on with the first “easy” option, ask yourself: Is this really convenient, or is it just costly? And if you’re unsure, we can help you figure it out.
Use our business loan calculator for a thorough look at your loan.
If you’re embarking on a business loan comparison and need some help, our Business Loan Calculator is the perfect tool to project exactly what you can expect from your ongoing finances.
Use our calculator and apply for a loan that suits your business’s needs today!