The business loan industry has come a long way since the days of a simple brick and mortar bank. In a world where millions of business owners need small business loans every day the system has no choice but to be nimble, fast, and efficient.
However, despite having made such substantial progress, the views regarding the loan industry are quite outdated and long-held beliefs reign on top. It is high time we all tackle the myths that surround small business loans and set the record straight to get over the fears that no longer exist.
Myth 1: It Takes Too Long To Get Loans
This may have been the case a decade or two ago, but the world has moved on from conventional bank loans that need weeks, if not months, to complete their vetting process. Hundreds of alternative lenders in the industry now have speedy and efficient processes.
With the digitalization of the modern world, loan applications can be processed online in as little time as a few hours and have capital ready for your business in a few days. Banks also process applications faster now to keep up with the ever-evolving alternative lending landscape.
Myth 2: Credit Score Is Everything
Though it may be important for many lenders, including banks and SBA loans, credit score is not everything. With so many types of loans being offered now by so many different lenders, there are many other requirements that are taken into consideration as well.
For example, most alternative lenders give more importance to your business revenue generation history than credit scores. After all, the primary concern for small business loan lenders is being paid back with interest on time, and how well you run your business is a better indicator of that than credit scores. In addition, credit scores aren’t always reliable since they are calculated from so many different methods so lenders are swayed more by your business’s ability to churn a profit.
Myth 3: Online Lenders Cannot Be Trusted
Due to the intangibility factor, many business owners are reluctant to trust online lenders. However, the online lending system is mediated through trusted online lending platforms such as Orumfy that provide transparency to the process. By using such online lending platforms, you can ensure that no unreliable or untrustworthy lender ever comes your way.
Myth 4: Only Established Businesses Can Get Good Loans
A popular myth is that startups and relatively new businesses cannot acquire good loans. This is not true. Among the many different types of loans now offered, startup loans are specially designed for new businesses. Moreover, alternative lenders can give loans to businesses that have been operating for as little as three to four months. Although interest rates may be higher and repayment terms may be steeper, new businesses have many avenues open to them from which they can get loans.
Myth 5: Large Loans Are Not Granted
In fact, it is favorable for lenders to grant larger loans as it would actually benefit them in the long run. If your business satisfies the requirements of the lender then there is no reason they shall not provide you with the required amount for your business. However, it is recommended that you ask for the exact amount you require, not more or less.
As you can see, not all of the common myths that surround small business loans are true. Before you consider taking a loan, you should be sure of all the options you have, consult experienced lenders, know more about the loan options platforms have to offer and make a well-informed choice accordingly.