The top 5 myths about small business loans

Myth #1: All small business loans are the same. 

Fact: There are actually a variety of different types of small business loans available, each with its own set of terms and conditions. So before you apply for a loan, make sure you understand the different types of loans available and which one is best for your needs.

‍

There are three popular types of small business loans: working capital loans, equipment finance loans and business lines of credit. Working capital loans are designed to help businesses cover short-term expenses, such as payroll or inventory costs. Equipment finance loans are for businesses that need to purchase new equipment or machinery. And business lines of credit are for companies that need a ready source of cash to cover unexpected expenses or unexpected dips in revenue.

‍

Myth #2: You need perfect credit to qualify for a small business loan. 

Fact: While it's true that having good credit will give you a better chance of being approved for a loan, there are many lenders who are willing to work with businesses that have less-than-perfect credit. There are plenty of lenders out there who are willing to work with borrowers who have less than perfect credit. The key is to find the right lender and to put together a strong application. When you take the time to do this, you will increase your chances of getting approved for a loan. And, even if your credit is not perfect, you may still be able to get a competitive interest rate. So, don’t let bad credit hold you back from applying for a small business loan. There are options available to you.

‍

So if your credit isn't perfect, don't give up on your dreams of getting a loan just yet. There are still options available to you.

‍

Myth #3: You need collateral to qualify for a small business loan. 

Fact: Collateral is something that you put up as security for the loan, such as your home or your car. For many small business owners, taking out a loan is an essential part of getting their business off the ground. However, traditional lenders often require collateral in order to approve a loan, which can be a major obstacle for start-ups and businesses with limited assets. The good news is that there are now lenders who specialize in small business loans that don't require collateral. These loans are based on the credit history and financial stability of the business owner, rather than the value of the business itself. As a result, they can be a much more accessible option for businesses that don't have the collateral to qualify for a traditional loan.

‍

So if you don't have any collateral to put up, there are still plenty of loan options available to you.

‍

Myth #4: You need to have been in business for years to qualify for a small business loan. 

Fact: Even if you've only been in business for a few months, you may still be able to qualify for a loan. Lenders will often consider factors like your revenue and cash flow when making their decision, so don't assume that you won't be approved just because you're new to the scene. 

Myth #5: Small business loans are too expensive. 

Fact: The interest rates on small business loans vary depending on the lender and the type of loan you're taking out. So while some loans may have higher interest rates than others, there are plenty of options out there that won't break the bank. Just be sure to shop around and compare offers before making your final decision. 

‍

Bottom Line:

Taking out a loan can be a great way to finance the growth of your small business. But before you do, it's important to separate fact from fiction when it comes to small business loans. There are many myths circulating out there about what it takes to qualify for a loan and how much they actually cost. By debunking these myths, we hope we've given you a better understanding of how small business loans actually work—and how they can benefit your business in the long run!

‍

So, if you're feeling motivated to take your business to the next level, contact National Legacy Capital Group today. We can help you assess your eligibility for a small business loan and guide you through the entire application process. With our assistance, you can put your business on a path to success!