We've turned the spotlight on the 9 most common funding myths that might be holding your business back.
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Only struggling businesses need to take loans out
It’s actually the opposite. Growth is the lifeblood of business success. And what do you need to grow? Funding.
Savvy businesses know that the cost of a loan can pale into insignificance when you look at the potential return it can deliver. We find the businesses who come to us are far from businesses who are struggling, but businesses who are hungry to do even better.
It’s harder to get a loan in today’s economic climate
Not at all. What loan providers are finding is that businesses aren’t asking to borrow. Possibly because the media has made us believe that lenders aren’t lending – which simply isn’t true. In the past 16 years we’ve lent over £1bn in funding and we’ve no intention of stopping anytime soon.
The way we look at it is this: Are you asking for a loan to help your business become more profitable?
Only badly managed businesses have cashflow issues
Managing cashflow can be a challenge, no matter how meticulous you are at invoicing. It’s never an easy balancing act because you have to invest in the product or service you’re offering before your customers pay for it. And, if you’re like any business we know, you’ll find that your own customers never pay as quickly as you’d like.
A short-term loan can help you keep that cashflow flowing nicely, so you can devote your attentions to chasing new customers, not suppliers.
Borrowing is bad for profit
That depends on why you’re borrowing. If the funding is going to bring you in more money than the cost of borrowing, that’s definitely not ‘bad’.
Strategic borrowing can help you expand your sales orders and increase your customer base – in short, make more profit. Successful businesses know how to use short-term loans to help them seize the moment. What is bad for business is a lack of investment and letting great opportunities pass you by.
Loans are risky – and expensive
That depends on who you ask. Ours are as transparent as they come with no setup fees, no early repayment fees and no exit fees. It’s the way all loan providers should work – but often don’t. Many businesses look at short-term loans as being an essential part of business planning. Imagine if you weren’t able to take on a new order simply because of cashflow?
That’s why, when you’re working out how much the loan is going to cost, it’s just as important to work out how much it could cost you if you don’t. Added to which you can get Corporation Tax Relief on the interest – so it’s win-win.
A bank is the best place to get a loan
When you’re looking to borrow, it’s hardly surprising that the first place that springs to mind is your bank. You already have a relationship with them and well…it can seem easier. Except it’s often not. There are other lenders out there who can offer you fairer rates and get you the money you need, quicker with a lot less paperwork.
Our rates are fair and completely transparent - with a Cash Advance that’s the fastest in the market. Money-in-your-account-in-less-than-12 minutes. If your bank has an unbeatable loan offering, then great. But if not, talk to us.
Loans take time to approve
They can, but they shouldn’t. We can do all the checks we need to do based on trading history, payment performance and director experience in a matter of seconds.
We can give an immediate indication of funding for any limited business in the UK, with a pre-approved cash advance (subject to credit rating). After all, a slow loan is as good as no loan.
Loans are built to trap you
It’s true that some providers try to entice borrowers with loans that you give you years to pay back. But who wants to spend years paying anything? Especially as each passing month brings another chunk of interest with your name on it.
We want to help businesses, not put a millstone round their neck. We offer short-term solutions as well as borrowing that you can spread out over a longer period if that’s what you need. And we don’t bury anything in the small print. We do fair lending that puts the borrower first.
A business loan should always be a last resort
This is the biggest myth of all. Over the years we’ve all been hard-wired to equate loans with debt and therefore something that’s ‘bad’.
A loan is simply a means of funding. Funding which could be essential for the success of your business.
We don’t think twice about borrowing a lump sum over 25 years to buy a house. Why?
Because we call it a ‘mortgage’, not a loan. But a loan is essentially what it is.
Successful businesses don’t have a block with semantics. To them, a loan is simply a strategic source of funding. A way to create opportunity. Which is what all businesses should be in the business of doing.
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