If you own a business or are in the process of starting one, you’ve probably encountered at least a few funding issues along the way. This isn’t surprising since setting up a business and keeping it running requires money, and it takes businesses months or even years to start earning substantial profits and become self-supporting. The good news is that there are many ways for entrepreneurs to gather enough funding, and one of the best options is to get business loans.
However, not all entrepreneurs are comfortable about getting loans. If you’re in the same boat, look deep into yourself and determine what’s stopping you from taking advantage of the benefits that business loans provide. More likely than not, you might be getting held back by loan “facts” that actually are myths in disguise, such as the following:
Myth #1: Only startup businesses have to get loans
Applying for loans is one of the most effective ways to get funding for a startup, but this doesn’t mean that loan products are only made for new businesses. If you already have an established company, you can also apply for a loan to open a second location, expand your product line, invest in new technologies, and take other steps to achieve long-term growth.
Myth #2: Only struggling businesses are allowed to get loans
People often associate commercial loans with floundering businesses. However, just because you need additional funds doesn’t mean that your business isn’t doing well! This comes from the fact that commercial loans can be used both to help companies stay afloat and allow successful businesses to hire more staff, rent a bigger space, and complete other projects to achieve long-term goals.
Myth #3: Small businesses find it hard to get loan approval
Business size doesn’t matter in loan applications since what lenders want to know is your ability to pay. If you can demonstrate that you’re a good borrower and that you’ll repay the loan on time, your application will likely be approved.
Myth #4: Businesses need to have perfect credit to get loans
Your business’s credit history does play a role in interest rates, but it shouldn’t stop you from getting additional funds since there are many lenders that offer business loans for bad credit in Sydney. Take note that most of them charge higher interest rates and will ask you to present an asset for collateral. However, the additional requirements are worth it since they’ll help you obtain more funds to support and grow your business even if your credit record isn’t perfect.
Myth #5: You can only apply for business loans from banks
Banks aren’t the only institution to approach if you need commercial loans. There are other lenders available, and many of them have more efficient loan application processes. With their assistance, you can access funds for your business with minimal hassle and get the proceeds ASAP.
As an entrepreneur, you’ll likely come across business loan misunderstandings such as those listed above. Know how to identify these myths and don’t let them hold you back from using loans to start or grow your business!
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