6 myths about getting a small business loan

6 myths about getting a small business loan

We’ve worked with a variety of small businesses and heard the same misconceptions about obtaining a business loan. Facts which are out of date or simply not true, have prevented business owners from asking for a loan to help with the growth of their business. There’s also the issue that new, start-up companies are unsure how or where to request business loans from. We’ve therefore focused this blog on busting the 6 myths associated with applying for a small business loan and how they can actually add value to your business. 

1. I need a perfect credit rating for a loan

Not at all. A good or great credit rating will make obtaining a loan easier, but it doesn’t mean it’s impossible if you don’t. Many small businesses check their credit rating online and can be put-off if they receive a negative result. By speaking with a Finance Broker, we can discuss your situation and find solutions that’ll work for you. We can explore the whole market, reviewing multiple products and lenders to find a product that fits your requirements based on your circumstances.

2. I can only source a loan from a bank

As the world, industries and economy evolves, so have the ways small businesses can obtain financial support. You might even discover that an old-fashioned loan is not your most suitable option. You could consider hire purchase, Finance Lease or Refinance via a Finance Broker, rather than a traditional bank loan. 

3. It’s too long and complicated to apply for a loan

Back in the day, applying for a business loan did take a lot of time, paperwork, and formal meetings with intimidating bank managers. Not anymore. Here at Busby Finance, we purposely aim to streamline this process, making it quicker and stress-free. Our process consists of getting to know you and your business, and then we’ll do the rest. Once your credit check and application has been approved, we’ll quickly present you with your best option to get funds released as soon as possible.

4. Small businesses can only ask for small amounts

Many small or start-up businesses believe that if they ask for too much they’ll be seen as greedy. This is certainly not the case and in fact, some lenders purposely look for those big-ticket loans. No matter the size of loan you’re looking for, as a business, you just need to prove you’re able to afford the repayments. We will work with you to make sure we present only the most relevant information to the lenders to give you the best chance of a successful approval and to make sure this condition is satisfied.

5. Only failing businesses ask for loans

The word ‘loan’ can have a negative connotation when it shouldn’t. Think about it, most of our everyday items have contracts or finances against them, essentially meaning they’re on loan until they’re paid off. So why is it any different for a business loan? If anything, it highlights the potential growth of your business; that you’re investing in its future by improving your tech, expanding your premises or hiring more departments to support your customers.

6. A loan will make my business less secure -finance brokers not financial brokers

What’s important to remember is that Finance Brokers, like Busby Finance, will be honest with you about your financial situation. They’ll only source loans they know you’re in a position to repay. Loans can also bridge any ‘quiet time’ within your business; keeping you and your team afloat until the busy periods pick up. 

Contact Busby

If you’re a small business looking for a cash injection to develop your business, then get in touch today so we can help you reach your goals.