Are you considering applying for a small business loan for your company? They’re a fantastic option for helping you to expand your operations, invest in new equipment or just manage cash flow.
However, there are a lot of myths out there about these loans that might be putting you off taking the step to apply. In this post, we’ll look at some of the most commonly believed myths – and provide you with the truth.
Myth #1: You need a perfect credit score to get a loan
It is often believed that small businesses need a perfect credit score rating to get a loan. This is completely untrue.
Whilst a good credit score can be beneficial in terms of the loan rates you are offered, you are not prevented from securing funds if your credit score isn’t perfect.
Alternative lenders to banks don’t focus as much on your credit score. Instead of looking at your financial history, they analyse your business’ financial realities based on market trends, local economic conditions and other criteria.
Myth #2: Online lenders charge higher interest rates
If you speak to lots of people in business, they will tell you that your best option for securing a business loan is through a traditional bank. Many people believe that online lenders charge much higher interest rates.
But this isn’t accurate. Whilst it might been true 15-20 years ago when the internet was still in its infancy, now many different online companies provide fast, small business loans.
Funding Triangle is one such option. We provide business loans starting at just 4.8% interest.
Myth #3: You can only ask for small sums of money
Plenty of small businesses believe that if they ask a lender for a large sum of money, they are more likely to be refused. But again, this isn’t actually the case at all.
Whether you want to loan £10,000 or £500,000, you stand a good chance of getting the funding you need. Some companies only lend larger sums of money, as these yield more in return over time.
All you need to do is prove that you’re able to afford the repayments, and you can often receive funding within 24-48 hours.
Myth #4: Applying for a loan is a long, complicated process
A few years ago, this would be true. Applying for bank loans, in particular, involved a lot of time, paperwork and formal meetings with scary managers.
But that’s now a thing of the past. Online lenders, such as Funding Triangle, aim to make the process as quick and simple as possible for you. All it takes is a couple of minutes to see if you’re eligible, before providing minimal documentation such as bank statements.
You can get a decision within as little as one hour of your application.
Myth #5: Small loans are only for failing businesses
Even now, some people consider applying for a loan a sign that your business is in trouble. You may think the word ‘loan’ has negative connotations, but the truth is that even large financially stable businesses apply for loans.
A lot of your office equipment will have contracts or finances against them, essentially meaning that they’re on loan until you pay them off. So why should a fast, small business loan be considered any differently?
Whether you need a sudden cash injection to aid with recruitment and expansion, or money to buy new equipment to help your business become more efficient, there are many good reasons for a healthy business to apply for a loan.
Apply for your small business loan today
Applying for a small business loan could be the way to help your business thrive this year. There are plenty of options to consider, from traditional bank loans to online lenders. But whichever you go for, securing the funding you need is now much easier and simpler than it ever used to be.
