If you want to save money, you’re in a good place. This article is all about you. Specifically if you like to save money when shopping.
One of the first things that diligent shoppers do when shopping is to compare deals. The internet has made this super easy to do and also cost-effective. You shop and find the best deal you think you can and then make a purchase and feel good about it. The same can be said if you’re shopping for your business.
The goal is to spend as little as possible on your business needs. From computer systems to office supplies, and equipment to services, sometimes you need financing to get what you need.
However, what we would say is that shopping for products might be a good idea, but shopping around for the right financing option can actually be bad for you.
Why Shopping Around for Financing is a Bad Idea
Financing companies are happy to give you a quote for your financing needs, but a quote is far different than approval. Typically, this estimate is based on approved credit. If you want an exact number, you have to secure an approval.
This requires that you check your credit rating/score. If you have good credit, this might not be a big deal. However, the more frequently your credit is checked in a short time, credit agencies begin to take notice and flag your credit score, docking it a few times.
Why do credit agencies not like it when your credit score is checked? Because it says to them that you are in desperate need of cash. That looks like you are struggling financially to get funding. Creditors aren’t able to see if you were declined or if you are getting money from multiple places. To them, it doesn’t matter, and you are seen as a credit risk.
This ends up costing you big when creditors do end up approving you. Most of the time this ends up pushing your financing to higher rates because you’ve had a recent credit score drop.
The best way to get the deal you want is to talk with a finance broker. Do your research, however, to make sure you partner with the right person and get the best deal for you.