Myths sometimes discourage business owners from obtaining loans. But Business Loans Scotland (BLS) is reaching out to small and medium sized enterprises (SMEs) to help them survive and thrive.
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It’s common for SMEs to take out loans, either to support their newly opened businesses or to fund their expansion plans.
But many misconceptions about business loans may overwhelm, intimidate or even put off business owners.
That shouldn’t be the case. Business owners should arm themselves with knowledge so they can take advantage of all the available support to put them on the path to success.
So here are four common myths about business loans in Scotland and the truths that will help you grow your enterprise.
Myth 1: Businesses only seek loans when they’re struggling financially.
This is not always the case. Most businesses actually seek additional funds to support growth and expansion plans. Once completed, these often have an extremely positive impact on businesses, making them more profitable.
For example, in 2017, Kristine Moody, the founder of Auchterarder-based junior sports brand, Team Magnus faced huge challenges to her business. She needed to meet the burgeoning demand for her products. With the support of a total of £145K in loans from Business Loans Scotland, she raised the growth capital needed to manager her inventory and tackle the logistics of trading internationally. As a result, her business turnover grew from more than £450K in 2018 to a whopping £3.5M in 2021.
Myth 2: Loan applications are time-consuming.
Loan applications do require detailed documentation like a business plan and historical accounts before the funds are granted.
But it only takes a matter of minutes to find out whether your business is eligible for a loan by submitting an initial enquiry online.
Business Loans Scotland only needs a handful of details to enable its team of loan officers to determine if your business qualifies for a loan.
Myth 3: Start-ups or small businesses are ineligible for business loans.
Small businesses definitely have access to loans through the Scottish government-funded Business Loans Scotland. In fact, BLS specialises in supporting SMEs, providing loans from £25,000 up to £250,000. It fills in the gap where commercial sources like banks fall short. It also offers a very competitive interest rate that’s fixed for the term of the loan.
Aside from that, BLS likes to remain in regular contact with borrowers to provide a support system that will help businesses thrive.
Andrew Dickson, Business Loans Scotland’s fund manager says:
We are here to support businesses that have a good commercially viable proposition, whether it’s a new business starting up, whether it’s an existing business that is looking to grow. We want to diversify the Scottish economy so we’re less dependent on a small number of industries. We want to try and get businesses to look beyond Scotland to trade with the rest of the UK and the world.
Myth 4: Only banks can provide a business loan.
Many people think that the only lender they can turn to when they need to borrow money is a bank. In fact, there are many different lending options and it’s important to determine your own specific requirements to find the lender that’s best suited for you.
Visit the websites of the government or your local authority to learn more about the various types of funding options available to you.
If you’re a business owner who’s looking to apply for a loan, find out if your business is eligible.
Learn more about how Business Loans Scotland helped a dance company develop a new studio.
