How to choose the business credit indicated

Once we have convinced ourselves that we need a business credit, and we have ensured in the first instance that we are able to repay the loan, now is the time to evaluate and compare the different banks or financial institutions that we can provide The credit required, and different financial products they offer.
In addition to the amount and requirements or conditions that may apply, the factors or criteria should take into account when deciding on the most suitable financial offer are:
The cost of borrowing
Before taking into account the interest rate offered by banks or financial institutions, which in reality we must take into account is the total cost of financing (known as total financial cost or actual cost), which is formed by the rate interest, plus other costs normally included in the loan, such as the costs of issuance or maintenance.
The total cost of financing is the true rate to be paid on a loan, and is the most important thing to take into account when comparing different financing options that exist in the market.
The loan term
The period is the period of time gives the bank or financial institution to repay the loan and pay interest. In evaluating the various financial deals exist, we must consider that the period is granted us according to our ability to pay.
The lower term is generally lower interest rate but higher fees to pay. And longer term, usually higher interest rate, but lower fees to pay, and therefore the possibility of acquiring a larger loan.
The type of interest rate
Another aspect we must consider is the type of interest rate. We must consider whether it is a fixed rate, variable interest rate, or a combined rate.
Fixed rates are constant during the life of the loan, variable rates are set according to certain parameters, and the combined rates usually start at a fixed rate and then become variable rates.
Fixed rates allow us to know in advance what the fees and, therefore, provide control and security of knowing how much are we going to pay. While rates have uncertain variables that may increase at any time, but usually are lower than fixed rates.
The main parameter to set a variable rate is the country’s economic situation, so if the economic situation is unstable, it is advisable to purchase fixed rates to avoid sudden increases in assessments. But if the economic situation is stable, it is recommended to buy variable rates that typically are lower than the fixed stars.
The depreciation system
We must also take into account the system or depreciation method used by the bank or financial institution, which points to the way they are going to repay the capital and therefore pay off the loan.
Basically we use two methods: the German method, where quotas are decreasing, initially charged high fees, which then will decline, and the French method (which is now the most common), where quotas are fixed, all periods are paid the same fee.
Early cancellation
We should also consider whether the business credit gives us the possibility to make additional payments in order to reduce the debt, or to cancel in advance of the deadline given.
We must bear in mind that sometimes the early termination option, may represent an additional cost to the loan.
The financial institution itself
Even when we are the ones who are going to receive credit, it is always desirable to take into account the reputation and experience of the bank or financial institution.
We must evaluate their customer service, their willingness to give us all the information you require, their ability to address any concerns you have, its speed to assess the request for the loan, etc..
Credit History
And finally, to choose the business credit indicated, we must consider our credit history.
It is advisable to purchase the products of financial institutions which are already clients, in order to form a good credit history and thus have access to credit later in more facilities and benefits.