Some myths are harmless, or even fun and enjoyable. However, there are times when myths aren’t fun or friendly — in fact, they’re costly and dangerous. Unfortunately, business lending myths fall squarely into the latter bucket. Rather than helping businesses get ahead, they hold them back and bog them down.
To help keep your business safe, strong and successful, take a moment to see if you subscribe to any of these 3 costly, but common business lending myths:
Business Lending Myth #1: Business Lending is Only Suitable for Covering Expenses
Using a business loan to cover an expense is perfectly sensible, but it isn’t the only use you should consider. Exploiting profitable, time-limited opportunities, such as hiring new staff, opening a new location or adding a new product line, can be made possible through business funding. Businesses that fail to realize this advantage of a cash infusion invariably find themselves chasing competitors rather than surging past them.
Business Lending Myth #2: You Need Collateral to Obtain Business Lending
It’s widely known that banks and credit unions won’t even assess a business lending application if sufficient collateral isn’t part of the picture (and “sufficient” is used loosely because it’s banks and credit unions that decide how much pledged assets are worth, not applicants). However, this certainly doesn’t mean that collateral is required — because banks and credit unions are not the only sources of business lending. At National Business Capital, we offer many financing solutions that do not require any collateral at all.
Business Lending Myth #3: You Need Excellent Credit Scores to Obtain Business Lending
Again, this myth is rooted in policies adopted by banks and credit unions, which insist on excellent personal and business credit scores. However, at National Business Capital, we routinely provide business lending to applicants with impaired or bad credit. In fact, our approval rate is around 90%, while at big banks it’s somewhere in the 20% range.
The Bottom Line
If you subscribed to any of the above before reading this article, then be assured you aren’t alone. However, now that you know the facts, you can shift your paradigm and clearly determine if obtaining business lending should be part of your strategic plan. If you’re looking for a business loan but a bank has turned you down due to low credit or collateral assessment, check out our eBook “How to Get Business Funding When Banks Say No” today: