Business Loan Myths

Most small businesses will, at some point in their life, go to a bank or other lending institution to borrow money for expansion of their operation. Many small business owners, however, initially fall victim to several of the common and potentially destructive myths that concern applying for loans. For example, first-time borrowers commonly believe:

• Lenders are lined up and eager to provide money to small businesses.
• Banks are willing sources of financing for start-up businesses.
• Loans are obtained by talking the lender out of funds.
• When it comes to seeking money, the company speaks for itself.
• A bank, is a bank, is a bank, and all banks are cold, impersonal institutions.
• Banks, especially large ones, do not need and really do not want the business of a small firm.