Repayment
Repaying your loan after getting the funds seems to be pretty easy. But missing your payments may lead to a huge disaster for your business. Be a responsible borrower. Know the best practices when it comes to loan repayments.
1. Proper Budgeting
It is important to plan your budget. Identify your income and expenses. When these things are properly identified, you can easily budget your finances. By keeping a good eye on your money, you will be able to direct all your finances to where they should be. And that includes being able to allocate a budget for your loan payments.
2. Lenders Late Payment Policy
There may be times when a business encounters money problems. And this could result in difficulty in repaying your loan. It would be best to check the lender’s late payment policy.
Lenders may have a short grace period, where businesses will not be reported to the credit agency. Some lenders may allow you to miss some of your payments, which will be added at the end of your payment schedule.
3. Communication With The Lender
Good communication with your lender is extremely important. When you are unable to make payments on time, make sure to inform your lender about it. Your lender may have alternative options to offer your business. This is only possible if you are communicating well with your lender and you keep them updated about your business.
After Repayment
Congratulations, you have succeeded in paying your loan. But before celebrating, you must first check if you have done the final step.
4. Check Automated Repayment System
For automated repayment systems, the first thing to do is to inform your lender about the payment completion. Sometimes, an automated repayment system still pulls out money from your account if not informed immediately. In the event that your account has been deducted after loan repayment, report it to your bank immediately so that they could make the proper adjustments.
5. Check UCC Records
The second thing to do is to check your UCC (Uniform Commercial Code) records. It is very important for your business to keep your credit score in good standing. If you have a UCC blanket lien under your business, this will not be good for you. Make sure that your lender has released any liens on your business. If there are liens left on your business records, applying for a new business loan in the future will become difficult for you.
