NEW YORK, NY--(Marketwired - Aug 7, 2013) - Driven by the high interest rates and onerous fees of many credit cards and online lenders, an increasing number of small business owners are seeking debt consolidation and small business loan refinancing options, mistakenly believing that consolidation can save them money and fees. This highlights a troubling trend of many small business owners blindly entering into loan agreements with fixed interest payments and poor terms.
Fueled by QuarterSpot's low cost and no personal guarantee loans, applications to the small business lender for loan consolidation and refinancing have risen sharply to nearly 25% of the $10 million in total loan requests it has received during the last 30 days. However, since most merchant cash advances and small business loans charge a fixed amount of interest and can include prepay penalties, many of these businesses will be faced with effective interest rates well above triple digit percentages if they refinance.
As a responsible lender, QuarterSpot cautions all business owners to first research their current loan contract to understand the financial implications of a business loan refinancing. For those seeking a refinance of a fixed interest loan, QuarterSpot recommends that they continue to pay on their current loans for the duration of the term, and seek out a separate loan if they are in need of additional capital.
"There is obviously pent-up demand for business loan refinancing, but this also shows that many small business owners are entering into their original loan agreements without fully understanding the terms and implications," said QuarterSpot CEO and co-founder Adam Cohen. "We want to educate all owners so that they understand the difference between good and bad loans, and are able to secure the best possible loan for their business."
To help business owners research and secure the lowest cost loan possible, QuarterSpot offers six basic small business lending tips:
1. Make sure your business credit profile is accurate by requesting a copy from Experian, Equifax or Dunn & Bradstreet;
2. Maximize your good credit accounts by working with businesses that report trade information;
3. Positive payment history is a major component of a strong credit profile so be sure to pay creditors on time;
4. Maintain sufficient cash reserves in your business checking account to increase your credit limit;
5. Choose a business loan without prepayment penalties or fixed interest repayments;
6. Compare loans and other financing options calculating the total borrowing costs (interest paid + fees + loan amount) in dollars and cents.
"Business owners should ignore advertised rates and instead compare borrowing costs in dollars and cents," continued Cohen. "Many online lenders and merchant cash advance companies calculate interest and fees using methods that cost small businesses double or more."
QuarterSpot provides business owners with a better source of funds through an automated underwriting platform that can reduce borrowing costs by as much as 85% when compared to traditional lenders. Further, QuarterSpot does not require small business owners to provide personal loan guarantees. Borrowers can apply for a loan in five minutes or less and receive funding in as little as 24 hours.
For more information about obtaining a QuarterSpot loan or to see if your small business loan is suitable for refinancing, please visit http://www.quarterspot.com.
QuarterSpot is committed to helping small business owners secure responsible small business loans that are clearly explained and fairly priced. Its innovative small business lending platform enables small business owners in search of capital to obtain loans on more favorable terms. For more information, please visit http://www.quarterspot.com.