Ethical decision making begins with collecting facts. So if you want to avoid running around in circles or making guesses on decisions that severely affect your small company then be sure to have all details on the matter.
Unfortunately, rumor is a fast traveler than truth, and negativity is becoming part of the human race, so you’ll most likely hear of the “impossible” from pessimistic people, especially when looking for Micro-business commercial funding. As a consequence, you may miss on a chance to expand your startup just because you give up before a fight.
Myths can make you panic. Fear can prevent you from making a move that will greatly determine your future. And the only way to do away with fear is to find out what’s coming ahead— collect the facts!
Here are four myths about business financing and the reality behind them
1-Loans Are Too Risky, Stay Away From Them
Debts are not risky unless you carelessly handle them.
Small business financing allows you to leverage the financer’s money and generate more money out of it. It will enable your micro-company make the most of opportunities that are above your financial capability. In a few words, business funding gives you the money you need to make more money.
The only risk involved is your merchant loan could turn into to a long-standing debt, but that’s only if you poorly manage the funds.
2-New Companies Can’t Access Business Funding
This is not true. Replace the word “can’t” with the phrase “find it hard to,” and the statement is correct.
While startups won’t quickly get financing, there’s a high chance you can find one.
Consider the numerous financing options obtainable by upcoming businesses. Have you heard of micro-loans? There are meant for startups like you. Crowdfunding is also another way to acquire extra funding.
But if the above options seem long and tiring, why not go for an easier solution: get a small business credit card.
3-I have bad credit; I Can’t Get Funding For My Business
Though your options are limited when seeking loans on bad credit, it does not mean you’re completely out of alternatives.
A credit check for a small business loan application reviews the following:
- The owner’s personal credit scores.
- Business credit scores.
- Both personal and business credit.
However, there are cases where credit scores are not an issue. Crowdfunding platforms rarely look into credit details. Invoice financing, merchant cash advances, and other cash-flow loans are mainly interested in future business revenues and may not review your credit.
4-Financing Is Too Expensive
This is partly true depending on the financing product you go for. But the market has a range of low-cost options like some microloans, SBA loans, crowdfunding, business lines of credit and even some bank loans.
Don’t get trapped in a funding product that does more harm than good to you. Choose funding that’s within your means, has a reasonable rate, and has a repayment plan that favors you. Plus, understand all costs of financing before picking it; make sure you can still make profits while repaying it.
Author bio: As an account executive, Michael Hollis has funded millions by using alternative funding solutions. His experience and extensive knowledge of the industry has become a true asset for First American Merchant, the No.1 Merchant Loan provider.