The economic crisis is causing more and more businesses to seek additional funding. Many individuals who are beginning their search still have long-held misconceptions about what makes them a good candidate for a loan. So, what do some of those misconceptions look like?
While traditional bank loans may have strict requirements for applicants, many business owners still believe that their credit score must be perfect to get funding. They may be unaware of other factors affecting their eligibility and terms, like having a solid business plan or showing their ability to pay. Alternative lenders also have their own requirements which may allow more flexibility for applicants. Considering the effects that COVID had on businesses, this is good news to many business owners struggling to keep afloat.
Some business owners who are now looking for funding may be under the misconception that online lenders are not trustworthy. While the former lack of regulation let some lenders set questionable terms, fintech has since matured. Applying for loans online lets borrowers compare terms and apply for multiple types of funding at once.That said, borrowers should still do their homework before agreeing to any lender’s terms.
Is your business doing enough to educate borrowers on alternative funding? And how can you predict how the market for your services will look? There are a few indicators that you can still rely on.