If you’re currently working on tax planning strategies with your accountant, you may have discussed small business loans. Here are a few common myths about small business loans and how working with a finance broker can ease the stress of finding the best loan for you.
Loans are for struggling businesses only
A common misconception about small business loans is that they’re for businesses that are struggling financially. This isn’t true and any type of business can apply for a loan to help them grow. Business loans can be used for more than just “getting back on your feet”. A loan can be used to buy new equipment or fit out a new store. If you’re working on tax planning strategies with your accountant, a small business loan could be beneficial in offsetting tax.
Your application will be unsuccessful if you have a bad credit score
A bad credit score isn’t ideal if you’re wanting a business loan however it’s not necessarily a deal-breaker. Alternative and non-bank lenders will usually look at your business’s cash flow statement and annual revenue. Nowadays, borrowers have access to many different lending associations that all have their own unique set of criteria. Make sure you have a good loan strategy (especially if you have a bad credit score) in case your first option doesn’t work out.
Applying for a loan is difficult and time-consuming
The good news about applying for a loan is that you don’t have to do it alone. Get the best deal for your individual situation by speaking to an expert. A finance broker can assist you with the application process, making sure you have the right paperwork and information needed to support your application.
Nowadays, applying for a loan is not as complicated as it once was and with a finance broker by your side, the whole process will seem less daunting. Gone are the days of lots of paperwork. With access to a panel of lenders, an unsecured business loan from a fintech lender, for example, can be approved within 24 hours of receiving the application.
You can only get a business loan from a bank
It’s all about knowing what’s out there and being thorough in your investigation. It’s a finance broker’s job to know what’s best for you and they’ll be able to tell you that many non-bank lenders in Australia specialise in small business loans, so if a bank is not your first choice, there are other ways to get your loan.
Alternative lenders are good for businesses that are only looking to borrow a small amount. It’s much easier to get approval on these and there’s less paperwork.
Loans aren’t worth the interest they accrue
So, the big question is… is it worth it? There’s no right or wrong answer and it’s based on your individual situation. If your loan is going to be put towards your next job, you need to ask yourself are the interest and fees worth the capital you’ll gain once you complete that next job. While applying for a loan has become less complicated, it’s still a big decision and there’s no need to decide on your own. Working with a multi-service firm could help you feel at ease and have your broker and accountant under the same roof, working towards a common goal, will help you feel confident.
How Carbon can help
Our Finance & Lending team are the best at what they do and is passionate about delivering a tailored approach to help grow your business. Our finance brokers sit down with you and take the time to get to know your business and what your needs are. We believe in a collaborative approach and that all financial services are interlinked. As a one-stop-shop, you can rest assured knowing that your broker, accountant, bookkeeper, and financial planner are working together to get you the best deals for your business. Get in touch with our team to help you with your small business loan.