You’re Planting Seeds
Before getting to where you want to be, you need to nurture the seeds of your exciting, new venture. Business loans help you grow those seeds.
Some common factors you need to help your business grow are:
As you grow, more tasks will need completing. Sure, your current team is more than capable of getting stuff done. But can you say the same for heavier workloads?
Getting the “right” people for your business means investing in them. Whether it’s retaining your current team or adding new talents to your roster, you’ll need funds to invest in them.
Whether it’s renovating your current office or expanding to new locations, you’ll need to have a steady flow of money to start things up. There’s never a shortage of emergency expenses, either. You’ll need to consider construction costs, rental fees, and utility bills.
Your business may require additional funds to purchase larger amounts of inventory. For instance, expanding your business obviously necessitates more supplies. Seasonal businesses may also need to apply for loans on certain months in order to meet a higher demand.
Here’s a really simple example: ice candy. Sure, you’ve got the best flavors in the market. You even have a secret ingredient to help you stand out. But as customers come rolling in (especially during summer), you better be sure you’re packed. It’ll hurt to lose any opportunity to sell, especially if you didn’t stock up in the first place!
Debunking Business Loan Myths
Let’s dig deeper into some business loan fears, and shed some light on these and other myths, shall we?
1. Business loans have high interest rates
Your experience of borrowing from loan sharks who can provide quick cash loans, but comes with a very high interest rates may have caused this notion. But business loans aren’t limited to just one type – there are different kinds that you can choose from, depending on your needs. For example, microloans can offer manageable solutions for your funding needs.
2. Only banks offer loans
There are alternatives to banks. Peer-to-Peer (P2P) lending can grant you funds in a relatively faster manner. Non-banking methods can work great locally like Easy RFC by Radiowealth Finance. Considering that credit card penetration is below 10%, people are more likely to go the alternative route!
3. Loan approval will take months
Business loans, once approved, won’t take forever to be funded. As long as you’ve submitted all the necessary paperwork and requirements, you won’t have to wait long. It sually takes 5-7 days for you to get your funds.
4. I need to have an excellent Credit Score
Your credit score doesn’t need to be perfect.
The Philippines doesn’t actually have a standard rating system for credit scores. Instead, banks use their own records to gauge credit scores or depend on firms such as the Bankers Association of the Philippines Credit Bureau.
The information gathered is then submitted to a centralized credit database, the Credit Information Corporation (CIC). The CIC produces credit reports for banks, containing your credit score. “Credit scores” determine whether or not you’re deemed credible by banks and credit groups. (This is different from your “credit history,” which refers to your ability to repay debts!) Depending on the loan you plan to get, there are several factors used to gauge an approval.
Short-term loans have a higher approval rating and don’t necessarily need a spotless credit history record. Also, some banks and non-banks refer to the record of business owners when approving a loan. Some other lending firms consider employment background as an approval factor over credit score. Here are some factors that may affect your credit score:
A shift in perspective will help you realize the benefits of applying for a business loan. Apply for a business loan now to start nurturing your dream!