5 Ways Applying for a Business Loan is like Dating
It’s another one of those nights: you start the day completely enthusiastic. You shower, put on your Sunday-best clothes, and think to yourself, “this is the day!” As you knock on the door, you hope against hope that this first encounter will lead to a profitable relationship . . .
. . . and then you get REJECTED!
No matter what you do, no matter how many doors you knock on, phone numbers you call, how much sweet-talking you do, you can’t seem to engage the interest of anyone. “Is it the way I look?” you might ask. “The way I talk?” Before too long, you’ve decided that you’re next best chance at really connecting with someone is to take your efforts online.
I am, of course, referring to applying for a business loan. Though, come to think of it, applying for a business loan and dating actually have quite a few things in common:
1. Your Credit Score Is Really Important
Wait. I thought we were talking about business loans and dating. Well, we are! According to The Washington Post, the quality of your credit score is actually a pretty accurate indicator of your future success in love. In general, people with higher credit scores tend to maintain longer lasting, more committed relationships than those with lower credit scores. Using over 15 years’ worth of consumer data from Equifax’s archives, the Federal Reserve Board surmised that people with a credit score of at least 700 at the end of the year were more likely than not to form a relationship during the following year (graphics courtesy of The Washington Post):
And not only are these high-scoring couples getting together, but they are also staying together. As credit score increases, the Fed reported, the likelihood of separating decreases:
The takeaway here? Having a good credit score indicates to both potential lenders and potential suitors that you know how to take care of your finances and that you are worth investing in. And as the number one problem for couples in America continues to be money, you can rest assured that seeking someone with a high credit score (while maintaining a high credit score yourself) is as good as gold. Of course, having a good credit doesn’t necessarily guarantee that you’ll find the man or woman of your dreams, just as it doesn’t guarantee that you’ll secure the exact business loan that you’re looking for. But a good credit score can go a long way towards both your relationship and small business goals.
2. Both Are Worth Planning for
You may have heard the saying, “a failure to plan is a plan to fail.” The same could be said for both dating and applying for a business loan. Think about it: if you really want to get serious about your romantic life, would you really want to throw caution to the wind and “hope for the best”? In the short-term, it means actually planning your date ahead of time – no last-second invitations – and if you do get her to agree to a date, it’s crucial you have some type of game plan other than, “watch me play video games,” or “hang out for hours.” According to Online Dating Magazine, failure to plan your dates in advances warrants a potential partner’s automatic rejection of future dates. In the long-term, it means having an idea of where you want the relationship to go, if anywhere; you don’t have to start naming your kids, but being clear about your expectations from a relationship will give you much better chance of securing one.
The same things are true with business loans. Business.com warns small business owners against not being prepared for the loan application process. If you don’t have a detailed business plan stating what you have to offer and what you expect do to with the money you’re being lent, no one will lend to you. It’s also important to present your lender with a plan for how you intend to pay that money back.
Just like having a good credit score tells lenders and dating partners alike that you are responsible with your money, having a plan in place will demonstrate that you have a clear vision moving forward – and you want them to be a major part of it.
3. Flings Are Great! But They Have Consequences
Whether you’ve seen a movie about it, or have a friend who’s had one, the fling or the one-night stand remains one of the most (pardon the pun) romanticized and even stigmatized areas of the dating world. The basic idea involves a person who – either by choice or perhaps inebriation – will lower their temporarily lower their standards and their inhibitions in exchange for one night of supposed bliss with someone else. According to one statistic from Statista, nearly 60% of Americans have admitted to participating in such encounters:
But just because so many people are doing it, does that mean it’s worth doing?
According to a study by researchers from Durham University in England, feelings following one of these encounters are generally negative. Nearly half of the women studied reported feelings of loneliness, emptiness, and even cheapness after a one-night stand; while the experience was fun in the short-term, it had some devastating long-term effects.
Short-term loans can carry a comparable burden. A piece by Entrepreneur.com suggests that when you take out a short-term loan without reading the fine print, you could be paying for a lot more than you think. Interest from a short-term loan can actually compound at a much more aggressive rate than a regular business loan, especially when you request repeated extensions. So while they are great for fast cash, they can quickly get out of hand (almost as if that person you met last night turns out to be a serial stalker). The Asbury Park Press further warned against “fast, easy [short-term] loans” whose APRs can be as high as 50% or more. Unless you plan to have your short-term loan paid off in under a year, you might find yourself the victim of “unintended consequences,” to put it lightly.
4. Don’t Worry: There’s Someone for Everyone
So, after you first few rejections, you might get the feeling that you’ll never find “the one.” But as the song goes, you really might be “looking for love in all the wrong places.” As the online dating market expands, the number of ridiculously specific online dating sites has increased. If traditional dating is not for you, you might try your luck with one of the following:
- Purrsonals.com – A dating site dedicated to cat lovers looking for love
- Amish-Online-Dating.com – A site for, you guessed it, the Amish. Although, you have to wonder what the Amish (a people who shun technology) are using to access the site.
- ClownDating.com – As scary as it sounds.
- FarmersOnly.com – “You don’t have to be lonely at FarmersOnly.com.”
- And the list goes on (and on, and on) . . .
Believe it or not, there are third-party business loan sites that work very similar to these online dating sites. Magilla is one of these companies; it matches borrowers to potential lenders through its online apps. Just like with a dating app, borrowers create an online profile, answer 10 simple questions (including their business type, the amount of money they’re asking for, and other preferences), and then they are given a list of potential lenders who might consider offering them a loan. So far, Magilla has connected lenders to borrowers seeking $55 million in loans!
5. Both Require Research
When you think about all the social media technology out there, there really is no such thing as a “blind date” anymore. In many ways, dating has become more or less like online shopping; when we are surveying a potential partner, we study their social media profiles just like we would a product description, and dig through the comments section just like we scour product reviews. We peruse photos, interests, status updates and tweets, mutual friends, ex-girlfriends and boyfriends – all before we even meet the person face-to-face. According to an article on Mashable, one in four people send a friend request on Facebook before the first date. Long story short, we want to know as much about a person before we decide to pursue a relationship with them.
Why should things be any different with a business lender?
Here at bestcompany.com, we’ve done the back-breaking research for you. We’ve reviewed dozens of business loans companies using an expert-driven ranking criteria system, so you’ll know who you’re “getting into bed with” before you sign the dotted line.