In the fast-paced world of small business, access to funding can open doors, but rushing into an agreement without full clarity can lead to costly consequences. Before you accept finance, it’s essential to ask the right questions and know exactly what you’re committing to. At SASFA, we believe that informed decisions lead to empowered businesses. That’s why we’ve outlined five key questions every SME should ask a finance provider before signing on the dotted line.
1. What are the total costs involved, including all fees?
It’s easy to focus only on interest rates, but make sure you get the full picture. Ask for a breakdown of all fees, charges, and penalties that could apply over the loan term. Transparency is a hallmark of ethical lending, and something all SASFA Members are committed to.
2. How does the repayment process work?
Is repayment daily, weekly, or monthly? Is it fixed or flexible? Knowing how and when repayments will be collected helps you plan your cash flow and avoid unexpected deductions. The repayment structure should suit your business cycle, not the other way around.
3. What happens if I can’t make a payment?
Understanding the provider’s approach to collections is critical. Will you be given a grace period or offered alternative terms? SASFA Members commit to fair, respectful collections that avoid aggressive tactics and prioritise communication.
4. Is this product right for my type of business?
Not all finance products are created equal, and not all are suitable for every business model. Ask whether the product fits your business size, industry, and cash flow patterns. Ethical lenders will be honest about suitability and help you find a solution that truly supports your goals.
5. Are you a SASFA Member?
Choosing a SASFA-accredited provider means choosing a partner committed to ethical lending. Our Code of Conduct ensures clear terms, fair practices, and responsible lending. If a provider isn’t a member, ask why not.
Funding can be a powerful tool for growth, but only when it’s built on clarity and trust. By asking the right questions, you safeguard your business from confusion, hidden costs, and financial strain. At SASFA, we’re here to help SMEs make informed, confident funding decisions.
Learn more about SASFA and our Code of Conduct at sasfa.net
