Jul 26, 2023
There are several myths surrounding business loans that can mislead entrepreneurs and business owners.
And when you don’t have a lot of experience with loans, it’s easy to develop misconceptions about how businesses don’t have to be an expert in order to get approved for loans; in fact, many people who apply for loans aren’t experts. You just need to understand loan terms.
In this post, we would discuss 5 misconceptions about business loans.
Only Banks Give Loans: The myth that only banks offer loans is indeed a common misconception. While banks are well-known for providing loans, they are not the only entities that offer lending services. There are a lot of financial institutions that offer loans to businesses. Some of them grant easy access to business loans without collateral. For example, an online lender like QuickCheck gives easy access to business loans of up to N1,000,000 without any collateral.
Loans are for struggling businesses: While it’s true that some businesses seek loans to overcome financial difficulties, many successful companies also rely on loans to fund expansion, invest in new opportunities, or manage cash flow. Loans can be a strategic tool to support growth and improve financial stability.
The interest rate should be your priority: When evaluating loan options, it’s essential to consider not only the interest rate but also other associated costs, such as origination fees, closing costs, prepayment penalties, and late payment fees. These additional expenses can significantly impact the overall cost of borrowing.
Collateral is needed: While some loans, such as secured loans or equipment financing, may require collateral, many lenders offer unsecured loans that don’t require specific assets as security. Unsecured loans typically rely on the borrower’s creditworthiness and financial health.
Business Loan is Hard to Secure: While it’s true that obtaining a loan requires meeting certain criteria, such as having a solid credit history and a well-established business, getting a business loan is not impossible. There are various lenders and financing options available, including traditional banks, credit unions, online lenders, and alternative financing sources, which cater to different types of businesses.
It’s important to dismiss these misconceptions and educate oneself on the specifics of business loans to make informed decisions and effectively leverage financing opportunities for business growth and stability.
Apply for quick loan today at QuickCheck