While it’s a blessing for business owners to be cautious thinkers looking out for every possible roadblock your business may come across, it’s also a curse since there are situations when being ultra conservations can be a hindrance.

Being overly cautious is the case when it comes to small business loans. While others may think that it’s arduous to secure finances for your business, it doesn’t really have to be.

Here are a couple of debunked common myths surrounding small business loans.

1. The SBAA Directly Provides Business Loans
The Small Business Association of Australia is an organisation advocating and supporting Australian small-medium enterprises (SMEs). The organisation’s primary focus is to associate with key stakeholders to achieve better economic policy for SMEs. It also provides resources and tools for SME owners to better facilitate their businesses like networking events, educational training and DOES NOT provide small business loans.

2. Your Only Option Is a Bank
There are many options available to assist with your business financing; a bank is only one source. While the bank might be a good choice in the past, these days, there are several non-bank lenders in Australia who specialise in small business loans. Other options that are readily available and rapidly growing in adoption include merchant cash advance, crowdfunding, and community loans. Compared to banks, the application process for alternative lending requires fewer prerequisites and more lenient evaluation that result in quick funds procurement.

3. You Need Perfect Credit To Secure a Small Business Loan
While a low credit score is not ideal if you’re looking at securing a business it’s not necessarily a deal breaker. Australia’s lending environment is different to what it was before. Nowadays, borrowers have access to several lending institutions such as lenders with niche business loan products and criteria. So, it’s vital to a good business strategy to know which lender to approach. Don’t waste time preparing paperwork for the wrong lender. Instead, talk to a loan specialist who can pinpoint a lender that’s right for you and your business goals right from the get-go.

4. You Need To Ask For A Small Amount Of Funding
You’ve probably encountered this tidbit at some point. While it makes sense if you’re asking for a loan from a friend, the business world is different. Simply because lenders make more of a profit on larger loans since the interest they get paid is larger. Though this is not enough reason to hand out a sizeable loan. You’ll also need to meet their criteria because the lender would want to know if you have the capability to pay off the loan over a specific time frame.

5. Low-Interest Rates Are The Most Important Factor
While interest rates are important, they should not be the defining factor when choosing business funding. Before you make a decision, always consider the terms of the loan. A loan that requires repayment in a short period of time with a low-interest rate may not be as suitable as a longer repayment period with a marginally higher interest rate depending on the terms and conditions tied to the loan. Try to look at the big picture and consider what works best for you and your business.

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