One of the best methods to secure startup capital is to apply for a business loan. With the help of a business loan, your business can finally get off the ground and reach the profitable areas of the market. However, not all entrepreneurs are utilizing the value of a business loan. They exhaust all other options instead of applying for a business loan first. The real culprits are the ‘myths’ surrounding business loans. By understanding and busting these myths, you can start scouring for business loans without inhibitions.
Myth #1: Business Too Small for Approval
Many entrepreneurs think that their business is too small to be approved. This is an old debilitating myth that affects the global entrepreneurial mindset. Scrub this off from your mind! Banks and financial organizations treat all legal businesses fairly – regardless of the size. In fact, some lenders are even offering small business loans to those who are just starting out. Your loan approval depends on the way you present your business.
Myth #2: Approval Takes Infinitely Long
While some lenders really take their time before approving a loan, some can release the funds in just few days. Startup entrepreneurs got the notion that approval takes too long because of different rumors spreading in websites, forums, and global markets. Even if few banks take long enough to approve and release the loan, the time is manageable. Why does it take too long anyway? Since you’re applying for a high-end loan, the lender must take all possible precautions. They must ‘hedge’ themselves from risk. Also, if you’ve submitted incomplete documents, the process may take longer.
Myth #3: New Businesses Have Smaller Approval Chance
Some misinformed borrowers spread lies about smaller approval chance for startups. Do not believe this notion. Times have changed – banks are now ready to embrace risks for the sake of good business and empowering business owners. New businesses even have greater support from banks. Rest assured, new businesses will have slightly better approval chances. Remember, your approval chance partly depends on your efforts to secure your application and credit profile.
Myth #4: Only Banks Can Release Business Loans
While the bank is the prime authority that releases business loans and other kinds of loans, it’s not the only type of lender. Credit unions and cooperatives are also great choices because they have smaller rates and easy application processes. Aside from that, you can also approach independent lenders. If someone tells you that you can only rely on banks, that person isn’t aware of the things going on in the lending arena.
Now that you’re aware of these business loan myths, it’s time to brace yourself and send an application to your target bank. You’ll still encounter hurdles, but you now have better awareness regarding the application. For additional useful information, try browsing bank websites. You can browse articles to further help you in business loan application.