Misconceptions About Small Business Financing

It takes money to operate and grow any business. Sometimes the demand can outweigh the supply, forcing entrepreneurs to seek out alternative options. That’s where small business loans come in. For many small business owners, the word “loan” has negative connotations. It’s understandable why that may be, as small businesses are known to climb upwards for long periods of time before they reach profitability. Here are some common misconceptions to that small business owners need to be aware of when considering small business loans.

“It’s always a bad idea to start a business with debt”

Small business loans aren’t the end of the world, nor does initial debt spell disaster for an entrepreneur. If you can secure start-up capital through crowd sourcing or other investors, then you will find yourself in the ideal position of not needing to take out a loan at all. Unfortunately, it’s no small task for new business owners to acquire the funding they need without taking on a business loan. Some businesses are in an industry that investors may not have an interest in, or if they are, they may have to relinquish equity in the company. Sometimes it’s best to begin with debt knowing that you have a high probability to pay it off than to lose partial control of your company.

“Lenders aren’t interested in supporting small businesses”

This is a misconception that deters new business owners from applying for small business loans. Though it is true that new businesses have short life spans depending on the industry, there are always companies that are willing to give new entrepreneurs a chance. Ace Biz Funding in Boca Raton is a perfect example of one such lender. We specialize in financing options for new businesses, offering entrepreneurs opportunities to obtain the needed start-up capital to acquire inventory, fulfill purchase orders and other common small business expenses.