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The outlook for small businesses looks good, according to the experts. The United States Treasury reports that banks participating in special government programs to fund small businesses around the nation have increased their small business lending by approximately $3.5 billion since the recession. There are no specific statistics on how many of these loans are second loans. But, there are still many small businesses that believe in the myths surrounding small business loans, and those that do not quite qualify for traditional small business loans for a variety of reasons.

Some of the more common myths about small business loans include:

  • My business is too new to qualify for a first or second loan.
  • I have poor personal credit so I cannot get a small business loan.
  • I’ve been turned down for a loan in the past, what are my chances now?
  • A secured loan makes me look bad and may not help me build credit.
  • Most of my debts have high-interest rates, so I cannot afford more credit.

The truth is that many of these ideas are based on negative experiences that small business owners have had in the past when the economy wasn’t so good. Or people have spread myths around obtaining capital for small businesses, taking advantage of the reputation that small business owners are not taken seriously.

Fortunately, there are alternative lending sources and a wide variety of small business loan options available to anyone who wants to start, support, or expand a small business. It’s about moving past myths, and getting down to the facts about financial opportunities for America’s strongest source of revenue and jobs – the small business market.


It is prudent to be continually thinking ahead when it comes to owning and managing a business. There could be many valid reasons for needing a second small business loan. You may want to:

  • Expand the company by purchasing better equipment, a fleet of vehicles, or to rent an office or warehouse space. You may also want to increase your influence with more advertisement and marketing, or you may need to add some more talent to your team.
  • You may need more working capital so there is more money at the end of each month to increase your sense of stability and be ready for emergencies if they come up.
  • Pay down high-interest loans and mortgages, credit cards, and other business debts can be a good reason to take out a second, lower-interest rate loan.
  • Handle payroll and taxes in a timely fashion instead of racking up fees for late payments. Other business expenses like licenses and insurance can be paid ahead of time to save money.
  • Maintaining a strong ongoing credit history with lenders, while building a stable of positive credit references can be a good reason to take out additional small business loans.


Before seeking out a second small business loan, it’s important to be informed about what lenders typically look for in a business to increase your chances of getting the funding you need. Most banks and other lending organizations are generally paying attention to your debt to income ratio (DTI). If you have paid down most of your debts, and have a good source of income and receivables coming in, this looks good for you.

Lenders are also looking for established businesses with good references and more than one lender. If you have just started your business, you can also consider other types of business funding, such as a secure or unsecured business loan, to get things rolling. Establishing a relationship with a funding provider now is better than waiting.

You also benefit from having a good repayment history, including any alternative funders you do business with. Try to pay your invoices early by a few days each month, or change the payment dates to correspond with your best revenue week. Lastly, try to demonstrate a little equity built into your business, such as how much is in your business savings, the equipment you have invested in, and the bigger clients you are working with. Be able to show this equity by having all reports and financial records in order.


It should go without saying, but you must make an effort to handle your credit well as a small business. This means paying your debts on time, not getting in over your head, and using reputable sources for your working capital. A small business loan, whether traditional or through an alternative lending provider, has the same impact on your credit history if you pay your bills on time. You can bring your credit score up and this can qualify you for lower interest rates and more money. You can also leverage a second loan to pay down any debts to reduce your debt to income ratio.

Building a long-term relationship with a trusted alternative lending like United Capital Source, can help you establish better credit habits with more flexibility and options than other forms of business capital.


There are some advantages of using alternative funding sources to get the same, if not better results. An unsecured small business loan from United Capital Source is a very safe way to get the money you need, while maintaining a positive credit history. Bad or poor credit is not a factor in most cases, and you can get fast approval and more money. You also don’t have to risk any collateral and the repayment terms are very flexible.

If you have had trouble obtaining a first or second business loan in the past, perhaps it was because you believed some of the myths around small business funding? Or you may not have had the information needed to approach the right lending source with your request. There is no reason to delay pursuit of a small business loan any longer. Why not reach out to UCS today for more information!

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