Even if it seems like things are going well on paper, needing a small business loan is common. Whether it be for a capital investment, expanding operations, or just addressing a cash flow shortage.
There are more than a few common myths out there when it comes to getting that financing. Here are 6 of the biggest misconceptions when it comes to small business lending.
Banks are the Only Option
Credit unions and traditional banks are the largest representatives of loans for small businesses. That said, they are not the only options. There are plenty of alternative lenders out there to choose from.
Just make sure that you check out all of the financing options before accepting one. Terms can be different, which can lead to a potentially better or worse experience as a result.
You Need Perfect Credit
Perhaps the biggest misconception is that you have to have perfect credit to qualify for a small business loan. While it is the top factor used for qualification purposes, it isn’t the only factor.
That said, for those with low credit scores, an alternative lender could be the best option. It can mean getting necessary financing while also working to boost low scores.
It Takes a Long Time
If you have heard that it takes a long time to secure funding, you heard wrong. The good thing about securing a small business loan is that it can happen sometimes within 24 hours.
Instead of putting funds on a credit card or depleting personal funds, apply for the loan you need and get the money you need in no time. It really can be a very fast turnaround.
Only Struggling Businesses Need a Loan
This is perhaps the biggest myth. Plenty of small businesses use a loan to support operational improvements, expansion plans, or to serve as a bridge during difficult seasons.
There are plenty of reasons to need a small business loan. What those reasons are can vary, but being informed is crucial.