Regardless of how established a business is, there are still multiple opportunities for it to grow, whether it’s by expanding and opening up new locations, acquiring more fixed assets, renovating, and so much more. But sometimes, there’s just not enough capital to make these growth possibilities possible; this is where applying for a business loan becomes a plausible solution.
Business loans are financial loans provided by an established banks or licensed money lenders the applicant can use for a variety of purposes, including business growth. However, some business owners feel apprehensive about applying for one because of some common myths that have been associated with them.
If you want your business to grow, don’t fall for the following myths about business loans;
1. A good credit standing is required
This misconception is fuelled by the idea that you need to have a good credit standing to be eligible to apply for a credit card. This principle doesn’t necessarily apply to business loans.
While there are certain business loans that require you to have little to no outstanding debts to qualify – there are also options tailored for businesses that are just starting to build their credit score. You can expect a higher interest for these alternative options, but it should be more than enough to expedite your business’ growth.
2. Loan applications are tedious
When you are trying to get a business loan, there will be specific documents required during the application process.
However, the idea that it takes a long time to process couldn’t be any more untrue because nowadays, especially with money lenders, the average processing time for loans from application to disbursement takes no more than 24 hours – not to mention a hassle-free experience.
3. Business loans are reserved for big businesses
There seems to be an unspoken belief that small business owners aren’t eligible to apply for a business loan simply because they aren’t established enough. But in reality, banks and money lenders are more than happy to entertain loan applications from big businesses to SMEs.
However, if you are a small business owner who wants to apply for an instant cash loan to acquire a larger sum of money, most banks and money lenders will need you to prove to them that you are more than capable of re-paying your loan. Your proof can be in the form of promising business plans, cash projections, financial statements, to name a few.
In doing so, you may also apply for other loans if you’re in need of urgent cash and the terms in the loan allow you to. After which, you may consider consolidating all your loans together and make a smooth repayment at one go. There are many approved debt consolidation companies that can assist you in putting together an effective debt repayment plan.
4. Applications for larger loans will get rejected
This perception is false because if you think about it, money lenders are a business as well, and businesses want to make money – the larger your loaned amount will be, the larger money they will get once you pay them back. That’s why it isn’t true that applications for larger loan amounts have a higher chance of getting rejected.
Your application will only be rejected if the bank or money lender thinks that you’re not capable of repaying the loan within the possible term.
If you need to grow your business but don’t have the financial means to do it, applying for a business loan is going to be your best move because it is easy to apply for and lets you propel your business forward.
Otherwise, if applicable, there are many other loan options out there to consider – debt consolidation loans, fast cash loans, bridging loans, and so on.