Access to additional funds is crucial for small and medium-sized enterprises (SMEs), especially when opportunities arise that have the potential to make them grow and expand. Surprisingly, however, many SMEs are not leveraging business loans to their full potential, despite the myriad of opportunities they offer for maximizing profits and achieving strategic objectives. In the Philippines, banks are mandated by the Bangko Sentral ng Pilipinas (BSP) to allot a small portion of their loan portfolio to small businesses. However, recent figures showed that the industry only managed to disburse only 1.95 percent, or Php 180.65 billion of the mandated 8 percent, or Php 739.43 billion to these businesses. This confirms the underutilization of business loans for small businesses in the country, with business owners preferring to rely on internal funds or forgo growth opportunities altogether.
This hesitancy among entrepreneurs to apply for loans may stem from longstanding misconceptions surrounding business loans, which often deter them from exploring financing options that could fuel their business's growth. In this short guide, we’ll debunk some of these common myths about business loans to help SMEs seize opportunities and thrive in today's competitive marketplace.
Myth 1: You Need a Strong Credit History to Apply for a Business Loan.
Contrary to popular belief, you don't necessarily need a flawless credit history to qualify for a business loan. While a good credit score can improve your chances of getting approved and potentially unlock better loan terms, there are options available for businesses with less-than-perfect credit.
Alternative lending options cater to businesses across the credit spectrum, offering tailored solutions to fit various financial profiles. In fact, some lenders prioritize factors such as business performance and revenue over personal credit history, making it possible for you to secure funding based on your company's merits rather than your credit score alone.
Whether your credit is excellent, fair, or a work in progress, there are lenders willing to work with you to find a suitable financing option.
Myth 2: It's Hard to Get Business Loans Approved
Securing a business banking loan may seem daunting, but it's not as challenging as you might think. With the popularity of alternative lenders like digital banks, online lenders, and credit unions, obtaining financing has become more accessible than ever.
For instance, digital banks like Maya Business offer business banking loans to loyal clients who have active Maya Business Deposit accounts and use Maya Business products for their online and offline cashless payment solutions.
To apply for a Maya Flexi Loan, borrowers don’t need to visit a physical bank. They can simply submit their loan application online through the Maya Business Manager dashboard. Afterward, the borrower will immediately see if the loan is approved or not.
With Maya Flexi Loan, there’s no need to jump through hoops to get your loan approved. You won’t have to line up at the bank, present your business plan, or wait a long time for approval. In just a few clicks, you can secure loan approval and get your business ready to grow.
Myth 3: All Business Loans Require Collateral
While some business loans may require collateral to secure funding, not all financing options will involve putting up assets as collateral. For instance, unsecured business lines of credit like Maya Flexi Loans provide access to up to Php 2 million in additional funding for eligible borrowers without the need for collateral.
Additionally, certain lenders may offer equipment financing or invoice factoring, where the equipment or invoices themselves serve as collateral for your loan. Ultimately, you can find the right financing solution that aligns with your business's needs and assets by exploring different types of loans and understanding their collateral requirements.
Myth 4: Business Loans Are Only for Businesses Facing Hardships
Business loans aren't solely reserved for businesses in dire financial straits. While they can certainly help businesses weather tough times, business loans are also instrumental in fueling growth and seizing opportunities.
Whether you're looking to expand to new markets, purchase new equipment, hire additional staff, or invest in marketing initiatives, a well-timed business loan can provide the necessary capital to propel your business forward.
Take Your Business to the Next Level with Maya Business Flexi Loans
Sign up for Maya Business and you’ll soon realize just how much your business can grow with additional funding on hand.
Enrolling in Maya Business allows you to open a Maya Business Deposit account and use it as your settlement account. With an industry-leading 2.5% per annum interest rate, you’ll earn PHP 25,000 in interest per year on a PHP 1 million deposit. What’s more, you can also send money to your partners and suppliers for free via InstaPay and PESONet, resulting in savings in the long run.
With a Maya Business account, you will be qualified for a no-collateral Maya Flexi Loan offer of up to PHP 2 million in just 3 months. As such, you can have the funding you need to move your business to the next phase of its development. Just use Maya as your primary processor for all wallet and card payments. The more you use our solutions, the better the loan offer will be.
Receive the funding you need to boost your business! Sign up for Maya Business today!
