Overcoming Small Business Fears: 7 Common Myths Holding You Back
Discover how to secure business financing without overwhelming paperwork, guarantors, endless bank visits, or complications.
Sanctions, currency fluctuations, and tax audits might seem intimidating for entrepreneurs. But in reality, the biggest challenges are often high interest rates and bureaucratic hurdles when applying for business loans. Or are they? Here’s how you can obtain funding for your business without drowning in paperwork, needing guarantors, or making countless trips to the bank.
Find even more helpful tips for entrepreneurs from ZAMONA Bank here.
1. Excessive Paperwork
Traditional banks often require a hefty package of documents that can take weeks to prepare. If any document is incorrect, you may have to resubmit it, prolonging the process and causing frustration.
The Truth
When applying for loans at bank branches, you typically need to provide:
- Valid identification;
- Business registration certificate;
- Financial statements and bank account verification;
- Loan application;
- Business license.
However, many lenders now offer streamlined online loans requiring minimal documentation—sometimes just an application and company turnover data.
2. High Interest Rates
Many believe that bank loans are prohibitively expensive for startups due to high interest rates, which can consume all profits or force additional borrowing.
The Truth
Competitive business loans with interest rates ranging from 9% to 20% are available today. Rates may be fixed or variable depending on loan duration—the longer the term, the higher the rate.
3. Lengthy Loan Approval
Waiting weeks or months for loan approval can be discouraging, especially without a guaranteed positive outcome.
The Truth
Most banks review business loan applications within one day to a week. Delays usually occur only if documentation is incomplete or additional proof of income or business legitimacy is needed.
ZAMONA Bank’s "Simple Steps" loan program offers decisions within 24 hours. Submit your application online today, and start planning how to invest your funds tomorrow. Required documents include only consent for credit history checks and company turnover data from your primary internet banking or accounting software.
4. Unnecessary Bank Accounts
Some fear that applying for a loan requires opening a bank account, which can lead to unwanted fees if the loan is denied.
The Truth
You don’t need to be a bank client to apply for a loan. Income verification from your existing bank account is sufficient. You will only need to open an account with the lender once your loan is approved.
5. Finding Guarantors
Securing guarantors can be difficult and risky, especially when involving friends or family.
The Truth
For business loans, you don’t need external guarantors. As the business owner, you can act as your own guarantor since the loan is issued to your company, a legal entity.
6. Large Collateral Requirements
Many believe significant collateral like property or vehicles is mandatory, which can be risky if the business fails. Gathering all related documents also adds complexity.
The Truth
Today, many business loans do not require collateral, making financing more accessible and less risky.
7. Multiple Bank Visits
The process of applying for a loan often involves several trips to the bank, causing inconvenience.
The Truth
While some banks require in-person visits throughout the loan process, ZAMONA Bank’s "Simple Steps" loan can be completed entirely online. A manager delivers all necessary documents directly to your office or preferred location.
Online loans are available up to $15,000, with terms from three months to one year and a fixed interest rate of 16.5%. Eligibility requires a business operating for at least 12 months. Application needs only your consent for credit history checks and company turnover data. Loan decisions are made within 24 hours.
Ready to learn more?
Discover the latest news and current events in Career, Education & Entrepreneurship as of 12-09-2019. The article titled " Overcoming Small Business Fears: 7 Common Myths Holding You Back " provides you with the most relevant and reliable information in the Career, Education & Entrepreneurship field. Each news piece is thoroughly analyzed to deliver valuable insights to our readers.
The information in " Overcoming Small Business Fears: 7 Common Myths Holding You Back " helps you make better-informed decisions within the Career, Education & Entrepreneurship category. Our news articles are continuously updated and adhere to journalistic standards.