Many SMEs will consider seeking finance in the form of a loan at some point throughout their start up or growth journey. Businesses may require funds to help with start-up costs or expansion plans however there are many misconceptions associated with business loans which can cause business owners to find the process of sourcing finance a daunting challenge.
So if you’re a business owner and are considering applying for a loan, then here’s 5 myths about business loans that we’re putting to bed!
Myth 1 – Only banks can provide a business loan
When looking to borrow money, many people assume that the only lender that will be able to issue a loan is the bank. However, there are in fact many different lending options available and so it’s important to find a lender most suited to your individual requirements.
Visiting the Government website or your Local Authority website will help provide more information on the various types of funding options available to you.
Myth 2 – Business only seek loan finance when they are struggling financially
Many people assume that when a business seeks additional funds it means the business is struggling financially which in reality, is not always the case.
For the majority of businesses, funds are required to support growth and expansion plans and so once completed, this often has an extremely positive impact on the business with sales increasing which in turn also makes the business more profitable.
A prime example of this is the story of Auchterader based junior sports brand, Team Magnus. In 2017 the demand for Team Magnus’ products exploded and Founder, Kristine Moody, faced huge challenges on how to meet the demand including managing inventory and the logistics of trading internationally. With the support of loans from BLS totalling £145K, Kristine was able to raise the growth capital required to meet demand and following this her business grew from one turning over £450,000 in 2018, to a massive £3.5M in 2021.
Myth 3 – Loan applications are time consuming
When applying for a loan you will have to provide detailed documentation such as a business plan, historical accounts and a personal statement to name a few before the money is issued. However, to submit an initial enquiry online to find out if your business is eligible can take just a matter of minutes.
Many lenders now are making the most of technology and, like our simple online application process, this can be submitted with just a handful of details that will enable our team of Loan Officers to determine if your business would be eligible for a loan.
Myth 4 – Applications aren’t considered on a case by case basis
When it comes to Business Loans Scotland as a lender, this statement is absolutely a myth. As a small team, we pride ourselves on offering a personable approach to lending and each enquiry that comes into us is reviewed thoroughly by one of our Loan Officers. This means that every single application is considered on a case by case basis and we understand that when businesses are seeking finance it isn’t just a one size fits all type approach.
We also like to remain in regular contact with our borrowers following receipt of a loan to maintain positive relationships and for them to know we are here as a support system to help the business thrive. Our aim is to help businesses across Scotland succeed by providing access to affordable finance.
Myth 5 – Start-up or small businesses won’t be eligible for a loan
This is definitely a MYTH!
We specialise in supporting Scottish SMEs with loans to start a new business or grow their current one and with loans up to £250K available, small businesses definitely have access to loans of varying sizes through BLS.
If you’re a small business owner and keen to find out if your business would be eligible for a loan, then more information can be found here.
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