Throughout your tenure as a small business owner, you’ll have many times where additional capital or an injection of funds can be the best strategic move for your business. You might need to finance an investment that will propel your business to new levels, or you might need some extra help during a tough economic time. Whatever the circumstance may be, securing a small business loan can be a great tool for business owners in all industries.
At United Business Funding, we support business owners in a number of industries, such as trucking, retail, construction, and more in getting the loans they need. Sometimes new clients feel apprehension about taking out a loan, so we are going to bust some common myths about the process and what it means to get extra funding.
1. Taking out a loan means your business is performing poorly.
This is completely false; taking out a loan is nothing to be ashamed of and does not mean that your business is in jeopardy. While loans can help businesses that are going through a rough time, they can also be exactly what you need to expand your business or support a growth initiative. Regardless of why you’re taking out a small business loan, it’s not taboo to do so. Loans are tools, just like your great employees and office equipment are tools for your business.
2. All lenders are predatory and dangerous.
Myth: BUSTED! It’s important to do your due diligence when picking a lender to work with because predatory lenders DO exist, but there are many lenders, like UBF, that will be great partners throughout the entire process. Don’t jump into an agreement with a lending firm that you don’t trust and you’ll likely have a very positive experience.
3. You need perfect credit to get a business loan.
This one is misleading and confusing…but it’s a big fat FALSE! There is a minimum set of requirements for obtaining a business loan through UBF, but your credit does not have to be perfect. We require a minimum credit score of 650, as well as proof of at least $10K per month being deposited into your business bank account. If you’ve been in business longer than 3 months and can satisfy these requirements, you’re eligible to apply for a loan with us!
4. You’ll be required to pay back loans faster than you can afford to do so.
If you’re working with an experienced lender, this is false, false, false. We are committed to working with all of our clients on a flexible payback schedule that is based on the cash flow of your business. Additionally, we won’t approve a loan for a business if we aren’t confident that the business owner can comfortably repay the loan. You might be eligible for an Early Payoff Discount if you pay back the loan ahead of schedule, but our main goal is to ensure that the payback is manageable for your business. Remember, you being able to successfully repay your loan is what our business depends on – we’re in this together!
5. Asking for more money means you’re less likely to get approved.
We’ll let you take a guess here…Right-O, FALSE! The loans we grant range from $10,000 – $2M, depending on the health of your business. Asking for a large amount is perfectly acceptable if your business indicates to our team that you can maintain the agreed-upon payment schedule.
Business Loans as Tools
Small business owners are resourceful, and the best ones know to use all the tools at their disposal. Thinking of a loan as a tool helps remove the stigma around taking out a business loan, enabling you to get the capital your business needs. Call our team or get a free quote on our website today!