Four Myths About Unsecured Business Loans Debunked
With an unsecured business loan, borrowers do not need to put up any business assets as collateral. If you stop making payments, the lender cannot penalize you by seizing assets like your house or car. However, there are many myths surrounding lending options that can confuse business owners. It’s important to distinguish between fact and fiction when seeking the right lending solution for your business. Here are four myths about unsecured business loans debunked.
Myth 1: Only Businesses in Financial Trouble Need Loans
Contrary to popular belief, businesses don’t only seek loans during financial crises. Many savvy business owners take out loans for growth purposes. Loans can fund expansion strategies, new product lines, and overall business enhancement, rather than merely covering existing financial gaps.
Myth 2: You Need Good Credit to Get a Loan
While a good credit score can simplify the loan process, it is not the only factor that lenders consider. They also evaluate business performance, cash flow, and growth potential to assess risk. Alternative loan options, such as asset-based loans, may not rely as heavily on credit scores.
Myth 3: Loans Are Only Available from Banks
Although banks are a common source for business loans, they are not the only option. There are various avenues for securing funds, including alternative lenders, credit bureaus, and private lenders. Conduct thorough research to find a reliable lender that meets your business’s specific needs. For example, a Cash Advance is an alternative lending solution tailored to retail businesses, allowing repayments to align directly with sales turnover.
Myth 4: Unsecured Business Loans Are Only Offered by Banks
The lending market has evolved significantly, with many bespoke lending products available for businesses. Business owners now have access to unsecured loans from a variety of sources beyond traditional institutions. Merchant Capital, for instance, offers repayments structured as a small agreed percentage withheld from future card transactions, avoiding interest rate fluctuations and large fixed monthly payments.
Myth 5: The Loan Application Process Is Always Long and Tedious
Obtaining a loan can seem daunting, but it doesn't have to be. While traditional bank loans often require extensive paperwork, alternative lenders leverage technology to streamline the application process, allowing for quick online approvals and turnaround times as short as 48 hours.
The Bottom Line
The unsecured lending landscape has evolved dramatically. Advances in technology and changing business needs have prompted alternative lenders to develop customer-centric lending options that offer faster solutions for small businesses. Merchant Capital has revolutionized this space, providing innovative ways to fund your business quickly. To secure funding for your small business within the next 48 hours, contact Merchant Capital today.
