Running a business can be quite expensive. That is why many people turn to small business loans. There is a lot of misinformation about small business loans. Below is a list of some of the myths about small business loans:
Myth: A Bank Is The Only Option For Getting A Small Business Loan
Fact: Banks and credit unions provide the majority of small business loans. However, there are a number of alternative funding sources. In many cases, people who are unable to get approved for a business loan with a bank or credit union are able to get approved by an alternative funding source. Advanced Funds Network, or AFN, is an option if you are looking for an alternative funding source. The requirements for getting a small business loan with AFN are less strict than those of a bank.
Myth: I Do Not Need A Small Business Loan If My Business Is Doing Well Financially
Fact: There are many businesses that get loans. Your business does not have to be struggling financially to get a loan. For example, if you want to expand your business and offer more products and services, then you can get a small business loan. Additionally, financial experts have stated that it is best to prepare to get a small business loan before you need one.
Myth: A Small Business Loan Is A Grant
Fact: A grant is a sum of money that does not have to be repaid. However, a loan has to be repaid. Your lender will only approve you for a loan if they think that you can repay it.
Myth: Any Business Can Get A Loan
Fact: The Small Business Administration has guidelines that must be met before one is approved for a loan. For example, the business must be independently-operated and owned. It must also meet employment and sales standards set by the Small Business Administration. Furthermore, there are certain industries that are prohibited.
Myth: You Need To Have A Perfect Credit Score
Fact: Credit score is one of the factors that both credit unions and banks use to determine whether a business is approved for a loan. They may use both your business and personal credit score. A credit score is an assessment of how well you have paid your bills. That is why it is important to have a good credit score.
However, it is important to note that you do not need to have a perfect credit score to get approved for a small business loan. In fact, some alternative lenders, such as Advanced Funds Network, do not require that you have a certain credit score.
Myth: Getting A Small Business Loan Is A Long And Drawn Out Process
Many people are reluctant to apply for a small business loan because they think that it is a long and drawn out process. However, the application process is not as difficult as you may think. In fact, the Small Business Administration has simplified the process. It takes about the same amount of time to get a small business loan as it does to get a traditional loan.