From being short on cash during a slow period to coming across an exciting expansion opportunity, there are plenty of circumstances that can lead a small business owner to start looking for additional funding. While virtually every business needs an influx of cash at some point, common misconceptions about small business financing may make you hesitant to explore your lending options. Today, we’re going to debunk some of the myths that may be holding you back.
Business Financing Myths
1. Banks are the Only Dependable Source of Small Business Financing
When it comes to small business finance, many people assume that a bank or traditional lender is the only reliable option. However, this is no longer the case. Today, there are many legitimate online and alternative lenders providing finance for small business owners. Since they often have less overhead and fewer restrictions, working with a direct lender often means fast approvals and quicker access to funds. These lenders may also have an easier application process, more flexible terms and conditions, and a wider variety of loan options.
2. You Need Perfect Credit to Get a Loan
While your personal and/or business credit score is often a primary factor in securing a loan, there are other options. For example, Zinch offers revenue-based lending solutions. This means that your funding is based on your business revenues instead of your credit score. If you’ve been in business for at least six months and have more than $10,000 per month in sales, there’s a good chance you’ll be approved for a loan, even if your credit isn’t great. If you’re worried about whether you’ll qualify for a loan, you can also get pre-approved in just a few minutes, so you’ll know right away how much funding you can access.
3. Getting a Business Loan is a Long and Difficult Process
When working with a bank, you may find that you need to complete a long application and provide a significant amount of documentation. Once you’ve submitted all of the information, it could take weeks or even longer to get approved and receive your funding. However, if you’re looking for same-day business loans, you’ll be glad to know other lenders, like Zinch, make the process quick and easy. We offer a simple, fully online application and have a fast approval process so you can stop worrying about your financing and focus on your business goals.
4. Small Businesses Can’t Qualify for Large Loans
It’s common to think that just because your business is small, you can’t qualify for a larger loan. However, this isn’t necessarily true. Many lenders are willing to provide a larger amount of finance for a small business, particularly if you can show you have enough consistent cash flow to pay it back. In some cases, you may be able to borrow several hundred thousand dollars or more, giving you the flexibility to make big moves within your business.
5. Taking Out a Loan Requires Fixed Monthly Payments
While some loans have a fixed repayment plan, there are other options. For example, a merchant cash advance like Zinch Flex allows you to receive a lump sum of cash and repay it based on a percentage of your sales. This gives you additional flexibility. If your sales go down, your payments will decrease as well. These payments are also automatically collected from your credit card processor or via ACH through your bank, so you can set it and forget it.
6. Only Struggling Businesses Apply for Loans
The truth is, many successful businesses take out loans to cover everything from improvements and expansion to seasonal slow-downs. While you may have been raised with the belief that debt should only be a last resort, using leverage can actually be a very smart move for your business. Taking out a loan can free up funds and allow you to buy more inventory, hire new staff, procure a larger space, or invest in marketing.
Even if you don’t need the funds right now, it’s a great idea to make sure you’re prepared. Many experts agree that the best time to start exploring your loan options is before you actually need the money. This will help ensure you’re ready when an opportunity arises.
Explore Your Small Business Financing Options Today
Contact us at (714) 500-6622 to learn more about your small business financing options. You could qualify for up to $250,000 in just 24 hours.
