• Maryrose
• Jul 23, 2025

5 Common Myths About Business Funding—And What’s Actually True

For many entrepreneurs, especially those from underserved communities—accessing capital can feel like chasing a moving target. One application gets denied, and suddenly it feels like the whole financial system is off-limits. But here’s the truth: often, what’s standing between you and funding isn’t your business, it’s misinformation.

In this post, we’re debunking five of the most common myths about business funding so you can move forward with confidence, clarity, and the right tools.

Myth #1: You Need Perfect Credit to Get a Business Loan

The Truth:
While a strong credit score can help, it’s not the only thing lenders consider. Many community lenders, CDFIs (Community Development Financial Institutions), and mission-driven banks look at your entire financial picture, business cash flow, collateral, personal story, and potential.

Tip: Focus on building both your personal and business credit over time. But don’t wait for perfection before exploring your options.

Myth #2: If You’ve Been Denied Once, You’re Not Eligible for Funding

The Truth:
Getting denied doesn’t mean the door is closed forever—it just means more preparation is needed. In fact, many entrepreneurs secure funding on their second or third try, especially after improving their documents or finances.

Tip: Ask the lender why you were denied and what you can improve. Then, take action and reapply when ready.

Myth #3: There Are Plenty of Grants—You Just Have to Find Them

The Truth:
While grants are real, they’re often highly competitive and limited in scope. They should be part of your funding strategy, not the only strategy. Loans, microloans, and other flexible capital options may actually get you funded faster and help build long-term financial stability.

 Tip: Stay grant-aware, but funding-ready. Prepare your paperwork for both grants and other forms of capital.

Myth #4: Only Tech Startups or Big Businesses Get Funded

The Truth:
Capital is available for businesses of all sizes—including side hustles, small service businesses, nonprofits, and food vendors. In fact, many local and regional programs are designed specifically for microbusinesses and entrepreneurs from historically excluded communities.

 Tip: Look into local economic development agencies, credit unions, and banks with inclusive lending programs like Stearns Bank.

Myth #5: You Must Be Profitable Before You Apply

The Truth:
Early-stage businesses, even those not yet profitable, can still qualify for funding. What matters most is showing a plan for how the funds will be used, a budget, and evidence that your business can generate revenue over time.

Tip: Have a basic business plan and financial projection ready. It doesn’t have to be fancy, just realistic and well-thought-out.

Knowledge is Power—And Preparation is Key

Now that we’ve busted the myths, the next step is learning how to actually secure the capital your business needs. That’s where our upcoming workshop comes in.

Access to Capital Virtual Workshop

Register Now

Hosted by EDACT in partnership with Stearns Bank
📅 Thursday, July 31, 2025
⏰ 11:00 AM – 1:00 PM CST
📍 Online (Free Registration Required)

🎯 What You’ll Learn:

• Practical steps to secure business funding
   
• How lenders evaluate applications
   
• Live Q&A with a Stearns Bank representative
   
• Resources to build your financial readiness
  
   

This session is perfect for entrepreneurs, startups, nonprofits, and community leaders looking to grow.

Click Here to Reserve Your Spot

Register today to take one step closer to financial freedom.