Many people hesitate to apply for small business financing because they’ve heard so many horror stories about the process. A certain level of complexity is necessary due to the large amounts of money often on the line, but new business owners also hear a lot of outdated and misguided information. If you’re debating whether you should apply for financing, allow us to give you the truth regarding five of the biggest misconceptions.
1. It’s always a bad idea to start a business with debt.
If you can secure financing through crowdsourcing or get investors to sign on for equity, you may not need to take out a loan or line of credit to get your business started. Unfortunately, most new business owners aren’t so lucky. Some aren’t in a line of business that angel investors find interesting, and others prefer to take on some debt than relinquish partial control of their company. Still others just want to get started as quickly as possible, and a loan is the path of least resistance.
There’s one thing to keep in mind here: a loan that you use responsibly won’t interfere with your profit potential. When investors keep telling you no, IRH Capital may tell you yes. For many new business owners or successful owners interested in expanding, a loan is the only financing option available.
Once you start discussing how much you can afford to borrow and under what terms you should do so, always consider the following points:
If you do think that you’ll need additional funding in the future, the Roll-Up Program offered by IRH Capital is a benefit to consider. We offer this program only to our current customers in need of additional funding. We simply add to your existing loan rather than asking you to go through the application process all over again. This is often easier than trying to get more cash from an investor, and it’s much faster than starting over with a new financing company.
2. Many lenders aren’t supportive of franchises.
Every lender has their own preferences when it comes to the businesses they finance, but franchise financing will never be out of reach as long as IRH Capital is around. We specialize in financing options for new and existing franchisees, and it goes beyond helping you pay those hefty startup expenses. We have helped many franchisees purchase or lease equipment and update older equipment. We can even help you purchase established franchise locations when you’re ready to expand your business.
3. It takes a long time to apply for small business financing due to the extensive paperwork involved.
This is true of some financial institutions, but it’s also true that some are extremely quick to issue a denial if your financial standing isn’t the picture of perfection. At IRH Capital, we use a simplified application process that keeps the paperwork to a minimum. This allows us to consider every applicant thoroughly without the overall process taking up too much of your time. You can even start the application process online if you’re in a hurry to secure funding for your next business venture.
4. Even if you secure funding for a business project, down payments and other upfront expenses will drain your available cash flow fast.
This is less of a problem if you select your financing company with great care and express concern about maintaining as much available cash as possible. There are many financing structures possible, and IRH Capital often uses creative models to accommodate every customer’s financial situation. This includes financing up to 100% of expenses, and at times, we’ll even finance down payments and other upfront fees. This isn’t a given for every situation, but you never know what’s possible until you talk to one of our professionals and discuss your needs.
5. Lenders only care about the bottom line.
This is perhaps the most disheartening misconception about small business and franchise financing. While all financing businesses must carefully consider the numbers involved, many also care about the individuals in which they invest. IRH Capital is a shining example. We offer a variety of financing options because we know that this isn’t a one-size-fits-all industry.
If you contact us with a dream that requires financial backing, you can guarantee that we’ll care about more than the numbers. We will work to find the right financing option for your situation, and we’ll take pride in watching you secure funding and succeed in business. When you’re ready to start that process, pick up the phone and dial 888-747-4227.